Again, from 6/17/2018 Total market view: "Bottom line - If markets go higher it is likely the leaders will have another push up to reach IWM HR2 / YR2 area and QQQ JunR2. If lower then likely international names leading down, and one could have already have a partial short position on anything below Q2Ps. Until VIX & VXX confirm trouble the bull trend of risk on gets benefit of the doubt. At the same time the combination of crazy momentum on IWM, quarter end re-balancing soon in play, frothy sentiment and the HR2 / YR2 combo make this an ideal area for a decent reversal."
And that was spot on, with the high coming on 6/20 fractionally above YR2 on IWM and near enough on JunR2 for QQQ. Speculative shorts - SMH, IWM, possibly QQQ and/or FAANG - all made a killing today.
6/21/2018 Daily comment: "That is quite a lot in the bear column and not much in the bull side. Although Friday could be a sideways day or limited bounce, my conclusion here is that today is not the low and more downside to come. Coordinated action on USA mains with VIX confirmation is usually a reliable signal."
It is very gratifying to recommend SMH long on 5/4 and then turn around short on 6/7. It has been fantastic to be long IWM from early May, and turn around short last week. This is The Pivotal Perspective. What next?
First let's tally the damage:
SPY HR1 rejection in process, hold of near test of QP and JunP
QQQ HR2 & QR1 rejection, but hold of YR1 as support
DIA QP rejection in process, today break of JunP and D200MA
IWM YR2 / HR2 rejection in process
NYA QP rejection in process, but hold of HP
VIX launch from YP the last 3 days, but high on JunR1
VXX close above HP and slightly above JunP
So that is a lot of bearish action - a few in the +s but far outweighed by the -s.
The mixed scenario that I thought could happen per the Total market view didn't happen today but still could; EEM fractional break of YP but decent comeback, FXI YP hold, INDA also still above YP, and RSX YP hold too.
It was interesting today that TLT and GLD were still rather weak despite the stock bloodbath. If really risk off, these should have done better. That said, having a few speculative shorts on SMH, IWM and tech stocks, and possibly VIX long per 6/20 Daily comment, adding shorts on XLF per recent Total market view, is sitting pretty.
SPY, QQQ, IWM and VIX below.
