Fascinating day with lots of pivot action. First let's assess what happened, then we can decide what to do.
On USA mains, QQQ broke its AprP fractionally. If we really want to be thorough (as much as possible, given schedule, I try), we can check cash index NDX, current futures contract and continuous contract. Both futures closed on the level, but are lower after hours. So - USA leader breaking a monthly pivot. This is not a huge deal in the scheme of things, but if we remove QQQ from leader board then it is interesting to see what's left (hint: a few global indexes and GLD & GDX).
On the other hand, SPY, DIA, NYA/VTI all held Q2Ps! This is potentially bullish in spite of tech break. It was almost as if resting institutional buy orders were sitting at the Q2Ps - check SPY below, do you think?
Lastly, IWM which had been 2017 laggard, rallied to near recovery of pivots. I am not thrilled with this move given positioning, but it is funny. IWM leads down all year and finally stock market starts showing signs of real risk and IWM rallies? Ha!
On the safe havens, GLD remains above all pivots - note there are not so many asset classes left in this category. GDX joined above all pivots today too FWIW. TLT continues above Q2P and AprP, but still below long term pivots, so GLD was the play here (weeks ago, not today). XIV *broke* Q2P and this is disturbing for any stock longs. VIX rallied to, but not above, the 2HP.
In global indexes - keep in mind as recently as the start of April all 7 were above all pivots - INDA well above al pivots current global leader in risk assets; SHComp rallied above its monthly pivot 4/5 and been above all pivots since; ACWI and EEM tested monthly pivots and held, still above all pivots; FXI broke AprP yesterday and lower today; EWZ broke Q2P 4/5 and still below; RSX also below Q2P from 4/7.
Clearly, stock exposure should not be 100% in this environment of safe haven strength. Current exposure is 60% net which was right idea but wrong vehicle as IWM hedge has cost. I go back and forth on this issue of moderately correlated hedges. Sometimes they work, like hedging EEM with FXI and getting more drop on FXI compared to EEM and successful. But here they didn't - right idea to be less long from last week, IWM worst choice vehicle. Sigh.
Since IWM has rallied to but not above Q2P, holding one more day. What about EEM hedge? If I lift that doesn't seem right to be 100% long yet.
Now - the question that everyone wants to know - was today 'it?' VIX and several USA main charts look possible. What I don't like is large VIX bar and XIV break, along with USA main leader QQQ break. I think this means more downside. If I had a video we could look at all the VIX explosions of the past few years and thoroughly analyze what worked as a buy bar and what didn't. For now let's say below the 1HP 15.99 and stocks have a shot at key low and rebound; above that and we do have some serious concerns in markets and stocks likely going lower.
Still, for now, I think QQQ and XIV are the tells and I am not so bullish despite the SPY DIA & NYA/VTI Q2P hold. If on Wednesday QQQ recovers as IWM clears Q2P I may change my mind.
SPY, VIX and XIV below.
