Market moving per tweet from 2/6 7:35 EST: "Since vol extended past 2/2, think instability in general through 2/15, & 2/9 looking like key date. With YPs along with D200MAs testing and holding on both ES and YM near term move most likely furious bounce that then fails and sets up lower or divergence lows into 2/9."
That was written about ES 2600 and since then rally to 2725 and now back down near 2650.
It is still time to be cautious. Many reasons:
VIX held both YR2 and YR3 as support for the last 2 days. What needs to happen is a small advance especially that stays within the upper Bollinger band, then a collapse under YR2. Similarly, SVXY (my replacement for XIV) is so far gone - but we could say better to be above YS2 before any stock buys.
USA mains are mostly below FebPs but above Q1Ps - except IWM which is under Q1P as well (and was first choice for main index shorts btw, mentioned near the top). It would be better to buy near a test of a level (if you wanted to try something quick, 2/6 open bang on the 2HP worked) but right now based on daily closes they are in between. If anything adding to shorts on IWM warranted given the Q1P pivot fail.
Leaders are failing. There is nothing I track that is above all pivots. As of yesterday's close a few things were knocking on the door of clearing FebP - XBI, FXI, RSX, EWZ, USO. And let's review what happened with these today:
XBI resistance at FebP - still a contender for buy
FXI -5% slam
RSX, EWZ and USO all slammed today with FebP rejections
It looks like more indexes will want to test Q1Ps. From there we can decide if there are enough signs to warrant a move to shift more long.
In addition to VIX and SVXY as noted above, other helpful signs would be a higher low in MCO (McClellan) / Advance Declines, higher put-call ratio (this move has blindsided many people since put-call well under early January and far under mid November).
SPX and VIX below.
