SPY clearly bearish today with Q4P acting as resistance. VIX still above Q4P and QQQ could have held OctP but didn't. A lot more coming soon on the blog!
10/13/2016
Nice comeback as indexes tried to hold levels. These varied a bit per index and variation. Here's a quick rundown:
SPX set basically holding OctS1s - ES1 & ESZ low of day near their OctS1s; SPX and SPY dipped below OctS1 but closed above
Tech set NDX, QQQ below OctP, but futures NQ1 & NQZ held - gives bulls a shot.
INDU set bounced off OctS1s, potentially bullish - YMZ contract low of day bang on OctS1 FWIW
RUT set managed to rally back and close above Q4P, also potentially bullish
VTI more like SPY, dipped below OctS1 but closed above
Interesting that headlines are pointing to oil strength as reason for the bounce - one of my emphatic recent long recommendations (see 10/1 Total market view).
So there is bit of mixed signals here with Tech set split and INDU and RUT trying to bounce / hold support. But VIX is higher above Q4P / OctP combo, without reaching any resistance, and that means any bounce is suspect.
Remember, in the past, when the leader holds the larger trend is alive. Right now the leader is Tech - NDX / QQQ / NQ1 / NQZ. Two of these held, and two didn't. I'll get back to bull side with any move above QQQ OctP 117.19 and especially get back to bull side with confirmation on VIX.
SPY, QQQ and VIX below.
10/12/2016
Though Tech (NDX QQQ NQ1 NQZ) held OctPs, SPY, DIA and VTI stayed below their Q4Ps - which acted as resistance - while VIX remained above its Q4P / OctP combo as well. That is a lot more points for the bears than the bulls today.
SPY, QQQ and VIX below. As far as I am concerned, VIX above the Q4P / OctP combo means trouble and I'll stay hedged.
10/11/2016
Regular readers know that I have not been full on bullish despite giving the edge to stocks over safe havens. This was mostly the right take, as safe havens TLT and GLD (and GDX) have gotten crushed, but stocks are also down.
From the latest Total market view: "Bottom line - I want to be bullish stocks with tech and global stocks doing fine above all pivots, oil rallying, safe havens crumbling, and VIX giving the all clear without being too low. At the same time I don't like this combination: YR1s acting as resistance on 4 of 5 USA main indexes, monthly pivots acting as resistance on 3 of those, and the same 3 daily 50MAs rolling over with downward slope. Sentiment is a bit too bullish on ISEE as well."
From 10/10/2016 SPY daily: "But, sorry there are two buts, ISEE is just too optimistic here with a close of 151. This is the 3rd highest reading of 2016. Also SPX a shade above YR1 2163 but not enough to say conclusively either way; in my view it still "looks like" resistance."
So the result was a slam of the SPX YR1 2163 which - again - looks like key resistance. Let's assess the damage:
SPX set Q4P break, with exception of ESZ contract
INDU set Q4P break
NYA / VTI Q4P break
VIX closed above Q4P too
All that is bearish.
But market leader NDX set (NDX, QQQ, NQ1, NQZ, COMPQ to be thorough) is a simple pullback to OctP. So this is not a total victory for the bears either. In the past, for whatever reason - Grexit, Ebola, Brexit, etc etc - when the market leader holds pivots the larger trend is alive. So watch the Tech set OctPs tomorrow!
If you took advice in the latest Total market view, you might have lost some gains compared to 10/10 but slapped on hedges early on DIA / SPY, while holding tech and semi-conductors on USA positions. Global stocks getting hit by stronger $USD, yet recently oil also doing well (both per recent posts BTW). This means I'd rather get out of global stocks ie FXI / EEM, because they are now under OctPs, and hold QQQ / semi-conductors, which are above. Biotechs looked great on September pullback, but have been weaker in October thus far.
If I had to pick a favored scenario here, I'd say SPY, DIA, VTI go to Q4S1s and QQQ visits Q4P.
This is my bias... but I will position on charts and not my opinion.
SPY, SPX and QQQ below. Note: 7th time we have seen selling from SPX YR1 level since September.
10/10/2016
From the latest Total market view: "If I had to pick one, given overall charts and tech leadership, I would say stock limited bounce off the SPY Q4P and then we'll see how far it gets."
Chalk one up for the bulls today as most USA mains reclaimed status of above all pivots - barely but still. NYA remains below Oct but otherwise SPX set reclaimed OctP, NDX continues all above, INDU set jumped above, and RUT back above all pivots as well. VTI also above all so I guess you could say 4.5 out of 5 above all pivots (because I have been counting NYA & VTI as broad indexes together, perhaps wrong, but this is how I've been doing it).
But, sorry there are two buts, ISEE is just too optimistic here with a close of 151. This is the 3rd highest reading of 2016. Also SPX a shade above YR1 2163 but not enough to say conclusively either way; in my view it still "looks like" resistance.
SPY and SPX below.
10/7/2016
Mixed action continues with bulls holding Q4P - again - yet OctP and SPX YR1 acting as resistance. A lot more later this weekend on the blog!
SPY chart shows pivots and MAs only, no resistance levels, to emphasize the support of Q4P and possibly the rising 100MA (thin black).
SPX chart shows long term levels only (Y & H) but includes resistance, again to emphasize, sine YR1 has acted as resistance for 5 trading days in a row.
Classic bull bear battle here.
10/6/2016
There were several encouraging signs on Thursday: SPY essentially held Q2P again (close enough), and DIA & NYA both did as well; IWM held onto its OctP too. So that several quarterly and monthly pivot holds for USA main indexes.
However, SPY, DIA and NYA all under OctPs which are still resistance and SPX YR1 looms just ahead. If you are long you don't want to see two weak advances that are unable to take out resistance.
SPY looks better but SPX looks like that YR1 is keeping the lid on the rally and next move more likely down. We'll see what happens.
10/5/2016
This does look healthy with SPY holding Q4P, DIA & NYA recovering Q4Ps, QQQ still above all pivots, IWM recovering the Oct to regain all pivots as well. This is exactly in line with my recent quarterly and monthly chart analysis that gave the edge to USA stocks and oil and a bearish tilt to safe havens TLT and GLD.
There are just two problems - SPY and DIA OctPs are still resistance, and more importantly, the crowd per ISEE seems to think the market in Q4 can only go up. The opening ratio of calls to puts was one of the highest I have ever seen. Though sentiment faded by the close to merely a high reading, things are just far too complacent here.
If you have followed my comments, you may be short TLT at the highs, or out of any recent longs; were not surprised by the GLD drop, as many have been; and have been long the leaders tech, semi-conductors, biotech, China on the September pullback, and recently adding free cash into oil or related vehicles. This is a good place to be right now. I just wouldn't be surprised at more trouble for stocks. DIA is the lagger, so hedge if another break below the Q4P or reduce on the long side.
SPY below.
10/4/2016
Don't say I didn't warn you.
GLD Monthly chart, 10/1: "This looks more threatening with falling 50MA (purple) acting as resistance."
TLT Quarterly chart, 10/1: "Red bar close back inside BB after being outside suggests down or limited upside to the Q4 BB."
Total market view 10/1: "While INDU is lagging, in general long term charts look bullish for USA stocks and a bit more negative for the safe havens TLT and GLD."
SPY Daily 10/3: "All this is bullish action for stocks. But I don't totally trust it, because we had an ISEE daily spike reading and that means the crowd is too optimistic."
Result was GLD massacre, TLT down sharply, both enough to spook stocks into a drop. What now?
It could be worse - SPY held Q4P exact, QQQ still strong above all pivots, and VTI holding Q4P as well. Also, VIX and variants seem unconcerned which points to yet another comeback for stocks. But DIA Q4P acting as resistance is not so great, and YR1s are again looking more like resistance for SPX and RUT, as INDU continues the decline from a near tag of YRA in August as well.
SPY below. If Q4P goes and VIX shows trouble, I will be thinking Q4S1 down near 209.
ps: While not a spike reading like 10/3, ISEE crowd is still too optimistic for what is happening.
10/3/2016
Mostly bullish for stocks today, as several USA mains held support as safe havens TLT and GLD weakened while VIX gave the all clear.
SPY is a shade below OctP, while all 3 other variants SPX, ES1 and ESZ are above.
QQQ and tech set continues strong above all pivots.
DIA is under OctP, but rallied to close above Q4P; similarly, NYA held Q4P as support but under OctP.
IWM and VTI held OctPs as support and above Q4Ps.
TLT clear drop below Q4P and broke OctP, bearish.
GLD below a QP for the first time since January.
VIX below all pivots.
All this is bullish action for stocks. But I don't totally trust it, because we had an ISEE daily spike reading and that means the crowd is too optimistic.
SPY, TLT and VIX below.
9/30/2016
Just like that, another comeback. A lot more coming soon on the blog.
9/29/2016
Things you don't want to see when you are long:
YR1 rejections (SPX set, RUT set, VTI already in process)
Q3R1 rejections (INDU set, NYA)
Monthly pivots acting as resistance (all USA mains except NDX)
VIX jump
On the plus side, safe havens are not the strongest (both below SepPs) and market leaders (Tech, semiconductors, biotech except for YP, FXI, EEM, RSX, EWZ etc) still above SepPs. Also, as of Thursday close the weekly SPX bar looks more like pause than rejection. So, maybe the threats pass.
But jeez INDU quarterly chart looks like a screaming sell here.
SPY and IWM with long term levels only for clarity; and INDU quarterly chart (with grey lines at 2015 price and quarterly close highs) below.
9/28/2016
4 SPX related charts below - SPX cash, SPY, ES1 continuous contract, ESZ December contract.
My tally: SPX positive above YR1; SPY and ES1 still vulnerable under YR1s; ES1 bullish above all pivots. We'll see what wins, the positive looking SPX and ESZ charts, or the more threatening SPY and ES1.
VIX is betting on upside, again clear red bar under all pivots. 4 SPX charts & VIX below.
9/27/2016
Healthy comeback! But SPX is still under its YR1, and RUT under its YR1. On the plus side, current market leaders Tech (NDX, COMPQ, QQQ, NQ) semiconductors (SOXX) and biotechs (XBI) along with China+ (FXI and EEM) had very mild pullbacks to or above SepPs and are taking off again. In addition, VIX closed slightly under its SepP as well.
SPX 2163 is really the level to watch here.
SPY and SPX below.
9/26/2016
A decisively bearish turn on Monday, with SPX breaking under YR1 2163 and RUT continuing rejection from YR1 1261.
In addition, NDX, the most bullish of the USA main indexes, is now back to the 2000 top at 4816 so anything lower would look quite bearish.
SPY below as usual, and current SPX & RUT weekly charts too (with long term levels only) for context.
9/23/2016
Yesterday: " re-test of key resistance on SPY and ES1; just 70 points higher for NDX; and now bang on here for RUT - all with VIX low of day down in 11s again. ... I remain in upside limited camp, and think we will see a trading top here, or a bit higher on INDU YR1."
And there you have it, combination of SepP and YR1 acted to halt the bounce. Is this another quick dip or start of real damage? I'll try to figure it out on the blog!
9/22/2016
A very smart person (JP Morgan head quant) says there is now nothing much to worry about and cannot imagine anything that will take SPX back down to 2050 but...
I see a re-test of key resistance on SPY and ES1; just 70 points higher for NDX; and now bang on here for RUT - all with VIX low of day down in 11s again.
I remain in upside limited camp, and think we will see a trading top here, or a bit higher on INDU YR1.
SPY below.
9/21/2016
From the last Total market view: "Probably things stay the same, ie, maybe next time."
And that's the way it played out. So far covering hedges and buying the dip 9/12-15 low per VIX and SepS1-S2s on USA mains has worked out. But back to interesting resistance on upside in the form of SPX YR1 and VIX SepS1.
The biggest gainers were the indexes / ETFs that held up best on 9/9 area drop. What held SepP: XBI/IBB and FXI. Slight break & recovery: EEM. Down to SepS1 that held on the low: QQQ, IWM. Then there were several others that held SepS2s. Still, if you focused on biotechs and China on the drop you have done very well on the bounce.
SPX and VIX below. Watch SPX YR1 2163 and VIX SepP at 13.12.
9/20/2016
Other than biotech XBI / IBB, not much action. Another day more bearish than bullish; SPY again resistance on the SepS1 and giving back gains. Also, IWM could have held SepP but didn't.
Originally I thought we'd see more than -5% drop from SPX highs, but VIX forced me to be less bearish by holding 2HP & Q3P resistance. We'll see what happens.
SPY & IWM below.
9/19/2016
If I look at the 5 USA mains and tally bullish/bearish developments, I'd say mostly bearish today as SepS1s acted as resistance for SPY, DIA and VTI. QQQ the leader faded; IWM did reclaim SepP which is bullish but lost a lot of gains. Let's not forget NDX 4816, the 2000 top.
Turning to safe havens, TLT below YR1 which at this point perhaps adding down pressure to stocks. VIX small up bar not sounding real alarm yet, and XIV higher more positive.
So not much to conclude. Markets on hold for the big event. If you are bearish then oil is below all pivots via USO and current contract, and below 3/4 pivots on CL1. EFA is one of the weaker indexes, below YP and SepP.
SPY, NDX (red line 4816) and USO below.