When I talk of markets "ringing the bell", it is days like this. I started this site near such days with this first blog post on 9/30/2015, talking about a key low. And so it was.
Today:
SPY rejected its YR1, crystal clear.
QQQ back to testing 1HR2, still bullish.
DIA rejected MarR1, not a huge deal; but YR1 / 1HR2 / Q1R2 cluster just above.
IWM rejected MarR1 and will likely be first main index to break a monthly pivot if selling continues.
VTI also rejected from MarR1, with YR1 / 1HR2 / Q1R2 just above that level.
So maybe the market will make a fool out of the more cautious trader I have been since February - not adding leverage and maximum 100% long, along with a few reductions that cost a bit - but, 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. An even better high would be some kind of pullback, then a rally so that more indexes would reach major levels (ie, quarterly, half-year and yearly). But sometimes market does not cooperate with the ideal.
Big turns can occur on the yearly pivots - just like August summer top on IWM YR1 (both times near exact), TNX *the low* on 7/8/2016 at YS2 exact, Brexit low on DIA YP near exact, and SPY YP nearby; I can go on and on and on.
In addition, there were a few indexes that have been strong this year that have finally traded below monthly pivots and with the look of rejection to boot: EEM, FXI and EWZ. I am tempted to short these, but will opt for hedge instead.
Positioning - well, if I said hedge on QQQ at 1HR2, and yesterday said "Based on VIX and other technicals, I think SPY YR1 or max DIA YR1 will be a decent top" there was a great low cost hedge opportunity on SPY today near the open. These hedges reduce portfolio to 70% long and are valid below the YP.
What the bears don't have here is VIX or XIV confirmation of the selloff. Oddly, VIX returned below all pivots today by a fraction. So I am resisting becoming even more bearish, since VIX is still OK with risk.
SPY below.