In these times of market turmoil I am writing more than usual because it is at these points that The Pivotal Perspective becomes most interesting.
Remember I issued a "trouble alert" on 10/27 and pointed out that it was one of the most technically threatening days of the year. That caution has been warranted. If you are a long term & long only investor and following this site, you have raised cash from mid August and now can comfortably decide whether to be buying. If you are more active and capable of hedging, then you could have had short trades or puts into this drop especially from Thursday or Friday - I don't issue trouble alerts often! Traders could have been short from "one of the most technically threatening days of the year." Now what?
I listed several key levels to watch in yesterday's extended post. Basically these are all 5 of the USA mains (note, NYA & VTI together count as '1' sorry if that is logically inconsistent it is just how I have been doing it) and then VIX & XIV as well.
Of these:
SPX set so far holding Q4S1s, potentially bullish
Tech set held Q4P for session, broke after close, now trying to rally as I type - inconclusive
INDU set staying quite firm with just a mild pullback to the NovS1, bullish
RUT set broke the YP, bearish
NYA held its YP and VTI held Q4P, both bullish
Meanwhile:
VIX below 2HP with small range up bar sets stage for reveral, bullish
XIV holding Q4P, bullish
So really we have one that looks OK for session but due to after hours we have to mark that as a question; one definitely bearish break; and the rest looking potentially bullish. I say potentially because we need liftoff from these levels and VIX reversal bar to have a buy signal to counter-act the trouble alert from 10/27. If VIX goes above 20.07, QQQ & XIV break their Q4Ps, then that's bearish and there is nothing yet to buy or cover hedges or shorts.
In addition, smaller range and slightly less volume selling bars, most daily RSI measures among the lows for the year. The aggressive partial buy was today. Technically this is roughly equivalent to 6/27 although I don't know if the results will be the same. You could also wait to see if market delivers a 6/28 move - clear high volume lift above pivots on USA mains indexes, holding key rising moving averages to boot, and VIX reversal - to add significantly more on the long side. If QQQ and IWM stay under pivots tomorrow and VIX is higher, that will look like serious trouble. We'll see what happens, but due to all the points for the bulls when I go through USA mains and VIX/XIV, I'm thinking the low is in or very close.
All 6 USA main charts along with VIX and XIV.
