If today doesn't prove the value of a rules based technical analysis system then I don't know what does. Consider, with the higher prospect of a Trump presidency markets were down 9 days in a row. Then with Trump actuality, most main indexes were down -4-5% overnight, then recovered in early pre-market for a not terrible open, and the SPX finished up +1%. Amazing!
How can one make sense of this? Answer: you can't, so don't try. Ignore the news and any attempt to figure out why, and just focus on charts - what is holding, what is breaking, what is rallying from support, what is falling from resistance.
Principal technical rules I am referring to are:
VIX pivot rejection means hold or enter stock longs
Stock index pivot clear or hold on test means hold or enter longs
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.
Oh yeah, TLT. I'll save that for a special post on the blog.
SPY, DIA, VIX below.