October 2018 drop predicted in advance

These calls were all timestamped on Twitter.

Larger cycle weakness from 10/10+ as called 9/23/2018
“Timing model Oct turn dates:
10/1
10/5 - risk on
10/13 - risk off
10/26

In addition, larger cycle weakness after 10/10-11 into end Oct or early Nov.”

Next -5% down move called on day of DJI high 10/3/2018
”Despite resiliency of main indexes $DJI $NDX and calmness of $VIX, my timing work says market has about 1 more week before a major risk off event likely for the rest of October. I won't press until everything lines up but just want to be clear on my view. Next 5% move is down.

D200MA breakdown call repeated 10/22/2018
"Despite RSI divergences and VIX suggesting stock bounce keeping to timing call of breakdown 10/19-26. SPX has complied but so far NDX and DJI have not - maybe in globex tho. Seeing a lot of people thinking to buy dip - market is in punish mode. Patience key.”

Then spotted the low chance on 10/29
”Probably I shd be more bearish but timing work says 76% Fibs maybe important. Still open to low idea. Also ES 30 min YP hold 2x.”

SPX 2830 target from 7/8

OK, this wasn't a huge move. But I was confident it would happen and it did. All comments from 7/5-7/8 were loaded with long ideas. As it turned out SPX exceeded the target by 2 days since then the 2830 has returned as resistance. 

7/8/2018 Total market view: "But right now I have to be pretty bullish here and simply thinking the since SPX just held major support it is likely heading to major resistance, and that level is 2830. If that happens then leaders can make new highs so that means IWM above YR2, and QQQ could potentially see QR1 HR1 YR2 cluster 181-184."

Result SPX high 2848, QQQ high 182.93, but IWM did not see above YR2.

INDA rec from 7/8

7/8/2018 Total market view: "A lot of global ETFs were beat up in Q2 as currencies slid and trade war impacted negatively. INDA has recovered back above its YP and closed fractionally above its MP as well; this could benefit from additional deep pocket buying and/or DXY slide."

This has been the first long side comment in any global ETF in months, as The Pivotal Perspective was clearly bearish global names from the start of Q2 with all 8 indexes that I track all below QPs. 

From 7/6 close INDA up 6.8% outpacing nearly every other major index / ETF.

Caught nearly the entire bond bounce of 2018

Sometimes I don't know why I am not a full time bond trader as my long term take on this asset class has been remarkable.

Quickly (not going to dig up links for these but if you are curious please search through my site) -

Nailed the top in 2016, one shot
Very vocally bearish in 2016 Q4
Very vocally bearish in 2018 Q1

5/20/2018 Bond bounce
7/7/2018 Bonds down and XLF up

Regarding the recent calls, 5/20 post for bond bounce was the first strongly positive comment about bonds all year - turned out written one day off the low. Then on 7/7 was clearly bearish just just after a key high 7/6.

PS: XLF has done great since that post too. 

Same 7/7 post: "TLT should drop back down. This will alleviate yield curve concern and XLF will get a bounce."

Nailed the June IWM top

6/17/2018 Total market view: "...the combination of crazy momentum on IWM, quarter end re-balancing soon in play, frothy sentiment and the HR2 / YR2 [168.62-169.76] combo make this an ideal area for a decent reversal."

Actual top 6/20 170.20, just one day close fractionally above the upper level. 

6/21/2018 Daily comment: "Serious selling today, but is it one day bear wonder or start of something larger? ... That is quite a lot in the bear column and not much in the bull side. Although Friday could be a sideways day or limited bounce, my conclusion here is that today is not the low and more downside to come." 

Looks like TPP caught another major market turn!

This site in under 2 years has caught some huge turns:

2/12/2016 Both Dow and oil buy (1 day off low of year for both)
7/6/2016 TLT short rec at price level hit 7/8 (the top in bonds!). This remains one of only two counter-trend short trades recommended on this site. 

And numerous trading turns, too many to count - most recently GLD buy 7/11/2017 - not the absolute low, but pretty close. Before that QQQ buy 7/7/2017, one day off pullback low. The list goes on.

And the latest, which could turn out a big one. I've always kept an eye on VIX and XIV but didn't start calling for a possible major turn until *this week!*

On 7/25/2017 I wrote a special blog post on VIX and XIV on the blog. This post includes a lot of views of VIX and XIV, but the latter portion pointed out that XIV was on the YR3. 

"OK - full analysis of other technicals does not give huge edge to a turn. But XIV is on YR3. I leave you with a few other charts for consideration."

And proceeded to list:
GDX 2016 high on YR3
Shanghai Comp 2015 high on YR3
GLD 2011 top on 1HR3 / YR3
SPY 2007 top on YR2
QQQ 2000 top 1HR2 / YR2

So if you are not getting the point about XIV being on YR3 with me pointing out GDX major high, China multi-decade high, GLD all time high, SPY & QQQ multi-decade highs, I cannot really help you.

*

If that isn't clear enough, then 7/26/2017 Daily comment: "PS: I think VIX may have bottomed today (on the 7/26 timing date FWIW), or near a bottom soon. I don't know if VIX will go lower to its Q3S1 or start moving up from today's low; the corresponding move in XIV would be a rally to its 2HR1, or simply slide under its YR3 tomorrow. But at the same time, even if today was the VIX low & XIV high, I don't think those betting for a huge move in VIX via calls in the near term will make much money. This has been a massive trend with smart $ players, and they should distribute first. This would mean a subdued period of higher lows in VIX as stocks go higher. Then, possibly in a few weeks or months, a real move higher in VIX. I still will be watching UVXY and perhaps VIX calls for opportunities."

Now anything can happen in markets and maybe VIX will collapse from here and we'll see into the low 8s. But right now I think the low is in on 7/26, the day I posted the bottom call. This does not preclude higher stock prices as mentioned above.

PS: JP Morgan Head Quant Marko Kolanovic has been calling for a VIX low for months. 

Bought the dip

While showing concern about the market from 4/5+:

4/5/2017 Daily: "Heads up! While not a full fledged caution/trouble alert, we have a semi-one today, with VIX close above the Q2P. I don't mess around with VIX breaking out to upside!"

4/6/2017 Daily: "VIX closed fractionally below all pivots again which removes the semi trouble alert, but move lower is not clear rejection enough to be fully bullish. That said, XIV looks ready to get slammed with clear resistance on the YR2 level - this would be bearish for stocks." 

4/7/2017 Daily: "Everyone knows that USA stock indexes were very resilient today, with ES futures finishing ~16 points off overnight lows. Given double whammy of Syria and jobs, does that mean all is OK and Trump bull market can carry on for Q2? No way! VIX and XIV have together sent the clearest warning signal this year, and SPY, DIA and VTI continue to have trouble at their AprPs while IWM is below its Q2P. Only QQQ holds."

4/8/2017 Safe havens: "Main point for stock exposure is that VIX is above Q2P and XIV has both YR2 rejection and AprP break on same day. So to my view, these are looking more threatening for risk assets since before the election."

Portfolio was buying back 4/17 and was fully long by 4/20, maintaining overweight in global indexes.

4/15/2017 Safe havens: "VIX jump above Q2P sounded alarm. ... Already at 1HP but not above. This sets stage for stock bounce next week." 

4/16/2017 Total market view: "VIX closing just under its 1HP of 15.99, and some SPX and INDU variations within striking distance of recovering Q2Ps, make a bounce a possibility. Should this happen with VIX reversing lower from 1HP, the portfolio will return more long, continuing to emphasize what has shown pivotal strength during this pullback."

4/16/2017 Total market view: "Though N Korea worries seem to have ebbed over the weekend, there are still political concerns ahead with the French vote. It is possible that VIX remains elevated, or USA stocks bounce and then fail. It is a week to stay nimble, because a hold here could be one of the better buying opportunities of the year; yet in this environment there is the risk of lower before the bottom that matters."

4/17/2017 Daily: "Let's count bullish developments... Safe havens all confirming... sentiment studies indicated enough bearish sentiment over the past 2 weeks... easy to jump back in here with all this pivot action happening simultaneously and VIX below 16 for session and dropping hard all day... This takes portfolio to fast 100% long." 

4/20/2017 Daily: "What a difference a day makes. Yesterday I thought the markets were hanging by a thread - but SPY Q2P held in convincing fashion. A lot of items in the bull column today..."

4/20/2017 Daily: "IWM USA small caps are especially interesting here, first time above all pivots since 3/21, a month ago. Tech and semiconductors both back above all pivots as AGG has faded. This is very bullish, and given daily RSIs and long term levels it is possible that some safe havens (AGG, LQD, MUB) just made a very key turn for the year."

4/21/2017 French election risk: "This may be part of the Q2 safe haven bid. ... But I think currency is telling the story here. Euro is in the middle of its range for 2017. It is below its YP and 2HP, but above its Q2P and still above AprP. DXY is weaker by comparison, closer to lows of the year." 

4/22/2017 USA main indexes: "Positive action on USA indexes last week as SPY, DIA, IWM and VTI all recovered Q2Ps as leader QQQ back above all pivots. But not as strong as it could be, with SPY, DIA and VTI below AprPs. NYA is the one non confirming index, still below Q2P."

4/22/2017 Politics and charts: "In a bull market, VIX RSI overbought along with pivot tests & holds have been many of the perfect places to buy. These are all pointed out in blue arrows on both pivots and RSIs, with one notable fake-out before the British election in red."

4/23/2017 Total market view: "We will find out Monday whether index & currency calmness was correct given French election. Perhaps after 2 spikes down and rallies (Brexit and USA election), people weren't selling in front this time yet should have been. But I have to go with what the market is doing instead of what I imagine it could do. The fact is by the end of last week nearly all USA main indexes recovered Q2Ps, an overbought VIX was rejected by 1HP, and these were happening as some sentiment meters were recently bearish. These are often the best times to take a stab on risk assets."

4/24/2017 Daily: "The Pivotal Perspective delivers again! The VIX 1HP rejection and multiple Q2P holds last week, in addition to EUR chart looking fine especially compared to DXY, gave me confidence to be fully long. Current portfolio already 100% in and the global indexes all did great with DXY down. Now I think there is the case for some leverage..."

Another major turn nailed

To set the stage for this post, I cannot claim the huge out-performance I have demonstrated in other quarters because I didn't rotate into tech and global indexes soon enough in Q1. But the portfolio has kept up with benchmark SPY and had some nice rotations out of heavy long IWM, maintaining XLF overweight until last week, jumping in INDA and EEM before recent pops. 

The real point of this post is that I've been largely bullish USA main indexes in 2017, but at the end of February pointed to valuation concerns; and since March 1 mentioned expectation of "a decent top" on SPY or DIA YR1 areas. It turned out SPY YR1 (or near enough tag to count, as related ES1 contract was within 2.5 points). Also as expected, the real damage didn't happen until after a high test. 

2/25 Blog post: SPX nearing longstanding valuation target

2/26 Total market view: "Price may continue to increase based on increasing earnings, but ultimately I think the markets will make a significant top with SPX in 18x-19x range."

3/1 Daily: "Based on VIX and other technicals, I think SPY YR1 or max DIA YR1 will be a decent top. That doesn't mean the market goes straight down. Usually the first reaction off a high is not the big drop."

3/2 Daily: "When I talk of markets "ringing the bell", it is days like this. ... this has many of the configurations of a classic top. What we don't really have yet is divergence on technicals, retests, and most importantly, more indexes on more than monthly levels, so this may yet still play out."

3/4 Valuation and fundamentals: "High of the week was SPX 2400. Basically the valuation target zone I have been mentioning since last August shifting over to Thomson numbers from WSJ data has been tagged."

3/4 USA main indexes: "SPX set sum - Major resistance cluster of YR1, 1HR2 and Q1R2 essentially reached and so far rejection. But momentum has been so strong that a test of this area more likely than an immediate big drop."

3/5 Total market view: "The most likely scenario from here is a consolidation or mild pullback for stock indexes (if they aren't going higher already) which then is bought and more indexes test key levels."

3/6 Daily: "But after this mini pullback completes, stage is set for high retest of sorts with major divergence, and this has potential to be a very key top."

3/7 Daily: "So far, top calls near 3/1 & 3/2 are playing out, but decline has been a creeper move. On the daily charts it looks like we could easily see a high retest of sorts. Zooming out to weekly or monthly charts, however, the drop looks more threatening, or at very least suggests minimal upside from here."

3/12 Total market view: "... there are significant factors which I think will limit upside ahead. First, monthly Bollinger bands on the USA main indexes. SPY and VTI have dropped back inside monthly Bollinger bands after being outside the bands in February. Once an index drops back inside the band, the band is more likely to act as resistance going forward. While QQQ and DIA remain outside monthly bands, this is fairly rare and at some point even a profit taking urge or other event will drop the price back in the band. Second, valuation has reached 17.99 per the current week's data and tagged the 10MA of 18x forward earnings (currently 2396). The moving average is still increasing which is a good sign, but I think the market may see some professional selling at this multiple. Third, the next visit to highs (should that happen) will likely involve RSI divergence on daily chart. Fourth, if the market can revisit highs or go higher, then major resistance lies on the SPY set (already tagged), DIA and VTI, which will all run into YR1 1HR2 Q1R2 clusters on any such move."

3/18 Valuation and fundamentals: "Sum - I consider the market fully valued here. We may see a professional selling reaction from 18x forward earnings and so far it has paused the rally when seemingly nothing else could."

3/18 USA main indexes: "However, market is pausing at SPX set cluster of YR1 / 1HR2 / Q1R2 resistance. At this point I think sideways or down is more likely that blast through..."

3/19 Safe havens: "VIX and XIV are still supportive of stocks. Levels to watch are move from MarS1 and YR2 respectively. XIV slightly above YR2 currently but "looks like" it may fade - please note the 11/3-4 XIV & stock index low was a fantastic tell. I always view tests of yearly levels as a big deal and the more things that say the same thing the better the signal."

Note: XIV broke YR2 in first hour of trading 3/21. 

3/19 Total market view: "Upside for stocks likely limited, but pullbacks will be bought. This has been the view all of March. Yet portfolio is back to 100% net long via 11 longs and 1 short hedge. If next week plays out more bearish I may reduce to 70-80% long via XLF or other exit, or hedge."

3/19 Total market view: "I didn't do a full Market top checklist post this week, but the difference between 3/20 week and 3/13 week is that now there is more divergence on daily RSIs and highs have been tested on SPY with lower highs on DIA. Also, more indexes have reached yearly levels - XIV YR2, EEM YR1, INDA above YR1."

2016 year in review

The collection of key calls below have been on the right side of markets - meaning mostly USA and global stock indexes, and also selected bonds, currencies and commodities - for much of the year. At nearly every point, The Pivotal Perspective has been long the market leaders early in the move, and locked in gains near the highs. The Pivotal Perspective has been bearish when correct to be bearish - on stocks in January, $USD in March and April, TLT and GLD in Q4. And it has been bullish when correct to be bullish - TLT and GLD in January and well beyond, stocks since March through Brexit and TrumpIt, $USD in Q4. Please see for yourself by reading the real time comments made on the day of entries, not after the fact, all documented below. 

Most usually I go with trends - buying and rotating into strength, and avoiding weakness (except as occasional shorts). Only three "speculative" ie pure counter-trend positions were recommended all year. All others required the index to be at least above a monthly pivot to be long (and most usually more than that, ie, above 2, 3 or 4 pivots); or below a monthly pivot to be short (again, most usually more than that, ie, below 2, 3 or 4 pivots). But these were the three - and only three - pure counter-trend plays:

DIA long 2/12, one day off re-test low of year 2/11
Oil long 2/12, one day off low of year 2/11
TLT short triggered by level specified in advance on 7/8, high of year within .02

Is there anyone else out there in the market commentary universe - or for that matter, any algo - who (or that) told you to buy stocks and oil both one day off the low of the year, and short bonds on the very top? And without buying on any drop, and shorting bonds the whole way up? Three for three on the biggest turns of the year? I don't think too many people or programs can match what I did this year in this regard. 

An assessment of the calls below leads to only one conclusion - despite all the current hoopla about passive indexing, an intelligent active approach is possible. Perhaps a bit less so for the very largest institutions who are less flexible in maneuvering, but if major players like Druckenmiller and Icahn can unwind significant positions in a day, then most of us can too. 

Funny, hedge funds are suffering huge withdrawals due to pathetic performance. And yet there *is* a different way which I have demonstrated from the start of this site - it just takes some fresh synthetic thinking. I hope to continue to demonstrate this in months ahead. 

January
Turned decisively defensive USA stocks 1/6-7 and bullish TLT 1/6 as well.
SPY to 186.25 from 1/6
Bear for real from 1/7
TLT buy from 1/6/2016

Targeted TLT at 134 when it was at 125.
TLT target 134.42 from 1/13

Highlighted gold at the end of January and recommended to add in early February.
GLD posts 1/27 & 2/1

February
Started buying back stocks and oil 2/12.
INDU / DIA speculative buy from 2/12
Oil speculative buy or short cover 2/12

Recognized this as possible low of year. 

Spotted Brazil, Russia and EEM out-performance early in the move. All three, especially Brazil, continued out-performance into November. 
RSX & EWZ long ideas from 2/13

March
Turned back to bullish USA stocks 3/12.
"Bull alive and kicking" with INDU above 17138 from 3/12

Recommended Dow Industrials and Semi-conductors on the way up. Semi-conductors among best USA sectors to hold for most of the year. 
DIA and SOXX longs on the way up

While being bearish $USD.
DXY weak from 3/16

April
Bullish USA stocks.
Bullish throughout April...

Until 4/19-20.
Top calls 4/19-20 and 5/1

May
Spotted 5/19 as decent pullback low. 

June
Bullish after Brexit.
Critical day 6/27, very bullish from there through early July.

July
Shorted bonds at the top! 
Bond short at the high!

This remains the only speculative (ie above pivots) non hedge short I have recommended on this site - ever.

August
Stayed long early August when several prominent names were all saying sell. 
"Long and strong" in August so far...

And added a top performing EEM early in the month. 
EEM long 8/3

Until turning more cautious and saying upside limited later in August and early September.
Caution comments last several weeks!

Started thinking about a big jump in rates that would benefit financials - written with TNX at 1.57 (TNX currently about 100 bps higher, and XLF up more than 20% since then).
Big picture thoughts

September
Expected "stiff resistance" to hold 9/6 (market agreed with a 9/7 key high)

October
Was clearly bearish TLT and GLD early in October.
Not surprised at TLT and GLD slam

And massively bullish $USD.
Long both $USD and oil for Q4

While ducking out of the way of a stock pullback later in the month.
Caution alert 10/27, lifted 11/7

November
Was accumulating financials in October, specifically recommended early 11/5, and proclaimed new sector leader 11/9.
All over financials before the jump!

Clearly bullish USA stocks after the election, and continued bearish safe havens TLT and GLD.
Bullish comments from 11/9+

December
Suggested partial portfolio hedge right on RUT / IWM highs.
12/11 Total market view

And got the FXI short! (The only non-hedge short since 12/7)
Caught China short!

Caught China short!

12/11 Total market view: "FXI weekly chart still looks like it could easily drop."

12/12 Daily: "Positioning was 120% long (not counting currency & commodity trades) coming into the week, and per Total market view could have had a quick reduction of 3 hedges on IWM as suggested near open and 1 FXI short on close based on the Q4P, taking total longs to 80%. with a partial hedge & short of -40%."

12/13 Daily: Held despite bounce. "...if FXI is visibly above DecP tomorrow then out."

12/14 Daily: Doubled up short. "Per yesterday's note, if market reacted negatively from yearly levels I mentioned taking gains on DIA. If out 1 then 100% long and the shorts & hedges adjust to for 60% net long. Adding 1 FXI short with Q4P and DecP resistance, below all daily MAs except D200, for -50% short and maintaining 150% exposure."

12/19 Daily: "1 FXI short (taking gains from later entry)" Oops. 

IWM shorts were specifically recommended as a hedging trade to lock in equivalent number of earlier longs while not missing out on further upside (because buy stop above YR2 would take off hedge). FXI only short specifically recommended since 12/7. 

View fullsize

Bullish comments from 11/9+

Actually, caution alert issued 10/27 was lifted 11/7 (see previous featured post) and from there I was recommending more longs (or lifting of hedges). 

11/9 SPY Daily: "So, DIA started fractionally below the Q4P and jumped above in the first 15 minutes. VIX started a bit above 2HP and collapsed all day. The Pivotal Perspective is clear. We don't know what will happen tomorrow, but for now, the markets are quite fine. (I suggest keeping an eye on VIX Q4P from here.) ... Sectors of note: XLF/IYF new market sector leaders; XBI/IBB massive jump. EEM/FXI noticeably weaker however, both under Q4Ps as all 5 USA mains held or recovered."

11/12 Winners and losers post on the blog: "We are trying to catch the winners, hold those, then take some gains and rotate into other winners. ... We avoid the losers, or hedge, or short. Strongest: DIA - above all pivots, above YR1; IWM - above all pivots, above YR1; SOXX/SMH - continuing strong above all pivots, above YR1, above 2HR2.

11/12 Monthly charts: "In general, stock indexes look quite healthy led by INDU on the main indexes, then RUT; and XLF on the sectors. Safe havens GLD and TLT are dropping hard."

11/13 Total market view: "4 of 5 USA mains are above all pivots (QQQ lagging, below NovP). 2 of those have cleared YR1s, which were resistance from August on. At the same time, safe havens TLT and GLD are collapsing while both VIX and XIV have said all clear from 11/7 on. This is all very bullish and must be respected no matter what you think of upcoming politics. ... USA indexes look great, most especially DIA and IWM among mains, and XLF/IYF financials among sectors. Safe havens look terrible. This is very bullish action for USA stocks."

11/14 SPY Daily: "Though QQQ broke Q4P slightly, everything else still looks quite bullish. SPY mild pause from YR1, but cannot say rejection when NovR1 holds as support. Safe havens especially all saying risk on: TLT and GLD both broke Q4S3s, VIX below all pivots, XIV above all pivots. Oh yeah, financials, small-caps and biotech continue melt-up."

11/15 SPY Daily: "The Pivotal Perspective is quite bullish today, because several key levels acted as support on the USA main indexes. ... Ding! 5 of USA mains (I count VTI & NYA together as one) have bullish action on key levels. Safe havens TLT could not bounce above Q4S3, and VIX & XIV stay very constructive for the market. Perhaps tomorrow will be different but right now long and strong stocks is the right view." 

11/16 SPY Daily: "...USA main indexes are quite fine today without much change from yesterday. No rejection from resistance, and the weak link Tech / QQQ continues to play catch up. SPY could have closed below the YR1 but didn't. Bulls still have the ball."

11/17 SPY Daily: "Trump honeymoon continues with everything positive for USA stock indexes. SPY looks to be lifting from YR1 which is very bullish. It has run into Nov R2, but no sign of resistance thus far. In addition, all safe havens (TLT, GLD, VIX, XIV) bullish for risk assets."

11/18 SPY Daily: "Overall action was mixed... If we allow VIX & XIV to settle the issue, then bulls still have the ball and this is more likely a pause that start of a big drop."

11/21 SPY Daily: "Amazing TrumpIt rally continues. SPY soaring above NovR2, DIA above 2HR1, QQQ above all pivots, and safe havens TLT and GLD continue to look weak. Despite my expectation of some digestion after the initial push of election week, markets just keep going up."

11/22 SPY Daily: "SPX set is already approaching the next major target area of 2HR1 2209, SPY 220.99 and ES1 2205 after clearing YR1s at 2163 / 217.63 / 2169 respectively. Despite the run up, we are not seeing signs of euphoria, and other USA main indexes are not on major resistance. This means the most likely scenario is tag of level, then higher or digestion." 

11/23 SPY Daily: "Markets continue to power up. SPY approaching key resistance and RSI near overbought, but without other signs of euphoria."

11/25 SPY Daily: "Still powering up. The charts I pointed out on Wednesday - SPY, IWM and XIV - are still in resistance areas, yet with no sign of pause or rejection."

Disclosure: Total market view of 11/20 not quite bullish enough!

Caution alert 10/27, lifted 11/7, markets fine 11/9 (except EEM)

10/27 Daily SPY comment: "Official trouble alert today, with SPY clear rejection from Q4P and VIX confirming risk above its Q4P."

11/6 Total market view: "Bottom line - Trouble alert from 10/27 was quite correct. The conditions to lift that trouble alert will be a VIX rejection of a pivot with clear move below the level. Right now VIX is above its 2HP and not yet at its higher YP. Either we need to see a move below 2HP, or higher to YP and rejection from there. Still I think it is better to be cautious with any long attempts with VIX above 2HP.

I will start sounding more bullish on the market when we see Tech set recover above its Q4P (QQQ 114.83), RUT set recover its YP (IWM 116.23), NYA above its YP (10302), and then SPX above Q4S1, VTI above Q4S1, all with VIX and XIV constructive for risk. Until then, cash on sidelines is quite fine."

11/7 Daily SPY comment: "Everyone back in the pool! 

Amazingly, not even the pros could get in (unless catching the falling knife last Thursday-Friday) with a monster gap even in globex. Everything checks out - Tech jumped above its Q4P, RUT/IWM back above YP, NYA huge jump above its YP; SPX & VTI above Q4S1, and DIA amazingly above all pivots! VIX confirmed with decent looking reversal bar below the 2HP, and XIV had huge hold of YP as well."

11/9 Daily SPY comment: "So, DIA started fractionally below the Q4P and jumped above in the first 15 minutes. VIX started a bit above 2HP and collapsed all day. The Pivotal Perspective is clear. We don't know what will happen tomorrow, but for now, the markets are quite fine. (I suggest keeping an eye on VIX Q4P from here.)

SPY above all pivots (YR1 level to watch)
QQQ fractionally above all pivots
DIA above all pivots and on verge of new highs
IWM above all pivots
VTI above all pivots (NYA bang on Q4P)

VIX collapse from 2HP and below all pivots
XIV above all pivots

Sectors of note: XLF/IYF new market sector leaders; XBI/IBB massive jump. EEM/FXI noticeably weaker however, both under Q4Ps as all 5 USA mains held or recovered."

All over financials before the jump!

As far back as mid August in Big picture thoughts: "So far my top call on TLT is still holding. I'm not totally certain that it does, but with TLT below the AugP then hold your shorts if you took that trade. Regardless, if TLT can rally again, then I think this will be a *very* key high. It might be higher, perhaps a double top, maybe lower; but after this, I will be quite bearish TLT and bullish rates. I am basing this opinion on the Bollinger band and RSI action on TLT across timeframes, some timing work, and the aforementioned perspective on government intervention in markets." 

And "So the translation of my historical and vaguely psychological references is this: maybe interest rates start to rise, and this is initially welcomed. Financials would rally, and money would come out of bonds into stocks. This will be enough to lift SPX into my ideal target zone of 2250-2500 from 2017 Q2 to 2018 Q2."

10/28 - Is Deustche Bank a good buy?: "Better financial buy: XLF. Holding up very well on drop, above all daily moving averages, and one of the few things still above all pivots (monthly, quarterly, half-yearly, yearly). Often what holds up best in drop is next market leader."

"Compare all this [DB] to XLF, one of the few things holding up the best in market weakness from August - September."

"[XLF] Above yearly, half-year, quarterly and monthly pivots. There are only a few asset classes with this status right now. May not take out highs in current range bound environment into election but I like this chart here and would look to accumulate. Hold above Q4P means about -5% risk for the position at 10/27 close price."

11/5 On entries: "XLF also a current leader, just a shade under NovP and entirely above Q4P this quarter. Not many assets in that category at this point. Needs to lift back above NovP and 50MA 20MA combo which would like turn MACD back positive; or drop lower near Q4P. 

IYF Financial ETF also decent so far with just a fractional move below Q4P, doing much better than other leaders like QQQ, EEM and FXI all of which had bigger moves under Q4P. Financials may take a hit if rates move the other way but for now holding up quite well."

These two were the only things I selected as potential new entry setups last weekend!

11/9 SPY Daily: "Sectors of note: XLF/IYF new market sector leaders; XBI/IBB massive jump. EEM/FXI noticeably weaker."

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Long both $USD and oil for Q4

Not too many strategists would do this kind of thing, especially within the same week. The Pivotal Perspective did and was right on both. 

$USD
I don't have the time these days to spend much time on currencies but when I was a strategist at a small hedge fund it was part of my routine. Pivots work on these too. 

Overall I've been bearish on $USD this year for the simple fact of rally attempts fading back under the YP and rejections, and was still somewhat skeptical of strength per this post on 8/27.

Then I changed my tune and recommended a long on 9/17. Right idea, but I wasn't thorough and didn't check the MAs, and stop idea was too tight. Sorry about that. The same parameters were met for a long on 10/4 as well, FWIW.

Then on 10/6 I wrote up a totally bullish post on $USD - no ifs or buts.

"Anyway, my main point here is that just because $USD has been sideways since 3/2015 doesn't mean the rally is over. It is entirely possible that DXY breaks out above in months to come and this could, along with rising interest rates, be the next big move in markets. This would probably put a lid on USA indexes, even if rising interest rates support financials."

"DXY Q - This is really very bullish, weak selling above a sharply rising 10MA and next move has been the easy spot UP."

"DXY M - Recent small red bar on this chart too, and right now launching above the 10MA and 20MA. Head and shoulders fans (I'm not really one of them) will watch 96-100 for a possible top, but I'm thinking higher."

"DXY W - It is hard to imagine a more bullish working off of extreme overbought conditions. Test of high, drop to low of range, rising 100MA holds massively, builds higher lows, and after another small red bar (those are great to watch for on the long side!) another blast off and above all moving averages." 

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Oil
10/1 Total market view wrote about bullish charts for oil three different times. 

"In addition, oil looks very interesting here showing 2 different signs of long term strength we have not seen in quite some time: the first close above monthly 10MA since July 2014, and the 2nd try above a long term pivot, also since July 2014. Oil strength will support the market."

"Watch oil, because the last time we started to see long term strength after a big drop that was on GLD in late January."

"Oil the story, with USO lifting above its 2HP for the second time this year. To put this in context, USO has only had 3 closes above a long term pivot since July 2014 and one of these two was last week."

ps: If you are thinking this buy looking late, I caught the low of the year on a speculative buy here. 

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Not surprised at TLT and GLD slam

9/29 Quarter end approaches special blog post: "Often but not always there are definitive moves near the end of a quarter or beginning of another as big institutions adjust their allocations."

10/1 Safe havens TLT weekly chart comment: "Held 2HP on recent low, but weekly chart with wick vulnerable to drop."

10/1 Quarterly and monthly charts special blog post on GLD monthly chart: "This looks more threatening with falling 50MA (purple) acting as resistance."

10/1 Total market view: "in general long term charts look bullish for USA stocks and a bit more negative for the safe havens TLT and GLD."

10/1 Total market view: "Bottom line - We'll have new Q4Ps and OctPs on Monday, and it will be easy to see what is above all pivots, what isn't, then what holds and what breaks."

10/3 SPY daily: "TLT clear drop below Q4P and broke OctP, bearish. GLD below a QP for the first time since January."

"Long and strong" in August so far...

This was despite some very prominent top calls made by 3 of Wall Street's biggest and most respected names that I wrote up here. 

The smartest guy in the room Gundlach, Wall Street's biggest perma-bull Tom Lee and Goldman ALL said sell, but my take was:

"Long and strong with VIX below all pivots and XIV above its YP I say." That was written early 8/2 before most of the drop that day (see link above).

"with Tech looking about to blast off and bonds finally a bit weaker, maybe the market will leave everyone waiting to buy a dip in the dust."

"...c'mon, SPX finally clears 2134 and NDX going for new all time highs and you are going to sell out already? Please."

On 8/2 after close in the daily SPY section, I re-iterated all the support that was under the market: "My take from here: Watch VIX / XIV monthly pivots, then SPY Q3R1 / AugP support, QQQ 2HR1 support, DIA AugP, and NYA AugP. As you can see, plenty of monthly pivot support very nearby. Much better for the bulls if those hold."

The only problem with this comment was XIV should have said yearly, not monthly. Anyway, result was:

VIX dropped under its AugP for most of the day on 8/3
XIV held YP exact near the low of the day on 8/3 and lifted from there
SPY held Q3S1 and near tag of AugP, although that must be bad tick on data as SPX and both ES futures held higher lows 8/3 compared to 8/2. 
QQQ held 2HR1 near exact
DIA held AugP near exact
NYA held AugP near exact

All charts exact below, except replacing SPY with SPX since SPY bad data tick.

On 8/3 bullish again in the SPY section (with just a sentiment concern): "So, the case could be made for an ideal pullback low here on multiple pivot support that has held. The crowd was a bit too bullish today so we'll see how far tomorrow gets. Big level to watch from here is SPX YR1 2163 which closed bang on the level."

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IBB / Biotechs leading 7/6

On 7/6 I pointed out how it had been almost a year since we have seen IBB leading on a daily rally. It was also the 3rd or 4th time this year (depending on how you count) IBB has lifted above a quarterly pivot. This move had both a monthly and quarterly on its side, but still below the 2HP and well under the YP. Still, I thought significant to call attention. 

Result 10+% rally from there in 18 trading days. 

Original here:

"Lastly, the other interesting thing we saw today was biotechs leading. It has been almost a year since that has happened! IBB tried to clear its Q2P 3x in Q2 only to go back down to test the low. Today is another try above a QP - is this the charm?"

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Bullish comments since 6/27

Most market participants are rather surprised at the market strength since the Brexit drop - but not here! 

6/25 Total market view: "To translate, market in serious trouble if VIX moves and closes above its YP." That did not happen! VIX stayed totally below its YP on 6/27 when stock indexes were going lower and INDU held its YP. 

6/27 SPY Daily: "The market has reached crucial areas. I know you may read this kind of thing often in other technical analysis but with pivots when I say this I mean it. Big levels in play from here all within 1% give or take: SPX, SPY, ES YPs, INDU & COMP, DIA, YM YPs, VIX YP. ... I have said from March... bull more likely than bear with INDU above its YP at 17048. So this level really must hold for a hope of a bullish resolution here."

6/28 SPY Daily: "And that was a major league hold! Yesterday I pointed out the big levels - SPX and INDU set YPs along with VIX YP. Monday's low was 15 INDU points above its YP level, a near perfect hold. And this time VIX got it right, closing below the YP yesterday despite stocks dropping much more. When factoring in VIX, the last time we had a day like this was 2/12..."

6/28-29 SPY Daily: "When factoring in VIX, the last time we had a day like this was 2/12: a big drop down from the YP (or near enough) in combination with holds & recoveries on several major indexes. Now this time could be the key buy for the rest of the year, or it just be a bounce before a failure. But near the big levels when VIX confirms is usually the place to take a stab. ... Stab long that is. Most aggressive buy on 6/27 based on VIX and focusing on any index that was holding pivots relatively better would have gotten you long on: INDU on USA mains, MDY midcaps on other USA, then SOXX and SPY; also oil based on CL1 continuous contract perfect hold of YP, and EWZ, then maybe some RSX. A fund could have made the quarter on aggressive trades off these levels the past 3 days with DIA +3.7%, MDY +4.4%, SOXX +5.4%, SPY 4.0%, CL +8.8%, RSX +6.5% and EWZ topping them all with +9.6% in 3 days!"

6/30 SPY Daily: "You know you have a method that works when a statement made mid-March applies almost perfectly more than 3 months later. From 3/12/2016: "Bull alive and kicking above 17138 (the highest of the INDU pivots, the Q1P) and still more likely than bear with INDU above its YP at 17048." Monday 6/27 low was INDU 17063, just 15 Dow points from the YP. I have seen this before - whether it is end of QE, Ebola, or Brexit - if the leading index holds a long term pivot, the trend is alive."

6/30 E-wave: "If all this is correct then we are about to get the last best move of the bull market over the next year or two. This will mean a new 5 wave up pattern on the daily, that will comprise W3 up on the weekly, that is part of W5 on the monthly. Got all that? If not keep it simple from my view back in March to stay on the bull side of stocks with INDU above 17048."

7/2: "SPY above all pivots. Totally appropriate to hold recent longs above the Q3P of 206.88, and a target zone of about 215 to 217.65 includes the Q3P and YR1."

7/5 SPY Daily: "Most USA mains don't look too bad here, dropping on to Q3P / JulPs and so far holding as support. After hours, ES is even closer to testing the level."

7/6 SPY Daily: "Well you didn't have to worry because SPY ES SPX all held their Q2P / JulP combos near exact for a decent rally off the lows. Yet I'd feel better about the rally with IWM and XIV above their Q3Ps"

7/7 SPY Daily: "Waiting game for the jobs number but if IWM and XIV are correct then stocks will be higher on Friday. We'll see!"

Catching key turns

Just after the 6/8 high...

6/9 Daily SPY: "The market has certainly been strong since the February lows and admit it acts like it wants to test the 2015 highs. But with strength of safe havens and other factors listed above, perhaps we are due for a shakeout of the weak hands."

6/10 Daily SPY: "But with the combination of valuation and sentiment factors, along with the incredible safe havens, perhaps we just saw a more important top on monthly R1s."

6/11 Safe havens: "In other words, all 4 of these safe havens sending warnings about risk."

6/12 Total market view: "But a few other components of my Total market view are considering if we just saw a turn of more significance."

* * *

And the 6/27 low...

6/27 Daily SPY: "The market has reached crucial areas. I know you may read this kind of thing often in other technical analysis but with pivots when I say this I mean it. Big levels in play from here all within 1% give or take: SPX, SPY, ES YPs, INDU & COMP, DIA, YM YPs, VIX YP. ... I have said from March... bull more likely than bear with INDU above its YP at 17048. So this level really must hold for a hope of a bullish resolution here."

6/28 Daily SPY: "And that was a major league hold! Yesterday I pointed out the big levels - SPX and INDU set YPs along with VIX YP. Monday's low was 15 INDU points above its YP level, a near perfect hold. And this time VIX got it right, closing below the YP yesterday despite stocks dropping much more. When factoring in VIX, the last time we had a day like this was 2/12..."

Regular readers know that I don't blab about key tops and bottoms constantly... only when multiple indexes are reacting against pivots. 

Top calls 4/19-20 and 5/1

4/19 SPY daily: "Might this be a trading high? Now the chances have increased, especially with the near tag of DIA on AprR1, and IWM on AprR1 too." And a specific hedge recommendation: "A general hedge here using your vehicle of choice (vehicle weaker under pivots for short, VI futs, XIV / UVXY, index puts, inverse ETFs to hedge out longs based on the AprR1) is very decent risk-reward idea."

4/20 blog on Elliott wave doodles: "If this idea is correct, w5 of W3 will ideally have relationship with w1 of W3, and it so happens we are bang on 100% here at 210.50. SPX AprR1 and ES AprR1 are very close. This would imply we are in ending stages of W3 here, followed by a larger drop, and then a W5 move for a more significant top."

5/1 blog post rather directly entitled Did we just see a major high in the market?: "It is possible that we just saw a major top." Note: SPY, DIA and QQQ highs 4/19-20, but IWM and NYA highs 4/27.