9/26/2017

SPY continues its pause under 2HR1 without any serious damage yet. To my eyes, weak down looks more bullish than weak up. Although I expect chop and more selling attempts into the end of the month, it is time to start thinking about the new quarter - and that means new quarterly & monthly bars, new Q4 and Oct pivots, and most important, often definitive moves as institutions position.

More on that in daily comments and blog posts to come.

Right now, best guess for stocks this week - upside limited, downside fairly limited, although I'd kinda like to see more of a shakeout before another leg up. If that happens we should see gains in TLT which is remaining above its YP this week so far. 

September and August are historically the weakest months for stocks. SPX/SPY so far merely -2.9%, RUT/IWM -7% in August but raced back to highs in September, and now NDX/QQQ putting in a one of the few down month bars since 7/2016. At this point (subject to change) I am expecting a risk on move to begin Q4 as safe havens drop. But at the same time, I am not expecting Q4 to be as easy for the bulls as many people think looking at historical trends for this entire period.

One more quick note - at this point, it is very difficult to find an asset class / index / sector under all pivots. For most of 2017, $USD/DXY and oil were clearly the weakest performers. We know what has happened with oil, and DXY is above a monthly pivot for the first time in months. However, there is something else - SLV.

If correct about risk on into Q4 as the first main move and a bit more to $DXY rally, then SLV could take it on the chin. It is already far weaker than GLD and GDX, and higher timeframe charts look terrible. And to mention again - just about the only thing I monitor currently below all pivots.

Other than that, some of the global names are dropping along with DXY rally and while i think these could go further this week, some shorts are late and i wouldn't be surprised to see dips being bought soon enough. I pointed out INDA weakness over the weekend on the blog, and so far downward follow through. Alas, no inverse ETFs like most of the others I track. EWZ is on my list for a possible quick trade into the end of the week with risk defined at the YR1 SepR2 combo.

SPY, TLT, SLV and EWZ below.

9/25/2017

The latest Total market view expected selling attempts from SPX 2503 - check. It also said the best way to play weakness would be QQQ - check. Last week I pointed out "exit bar" for SMN - check. 9/18 special post on oil said it could be "worth a significant position" - check!

This is a mean reversion move with first half favorites tech, global stocks and EURUSD getting hit, and first half laggards IWM, XLF and USO/XLE, along with DXY, rallying. 

SPX faded a bit from 2HR1 as expected but doesn't look that bad. VIX also stayed under all pivots and XIV barely budged. However, TLT reclaimed its YP - again. TLT has now managed to lift above this level several times this year. This threatens the XLF idea a bit even though it too was basically flat on the day.

SPY, QQQ, USO, XIV, and TLT below.

9/22/2017

Stock held up OK today - certainly could have been worse - and again safe havens are trading weak. 

However, SPX weekly close under long term resistance with doji bar invites selling.

As usual, a lot more coming up on the blog. 

SPY and SPX below with red arrows at 2HR1.

9/21/2017

I'll be honest - for session there were just minor signs of weakness and if you included safe haven analysis then the conclusion at NYSE session close would have been to hold longs.

SPX broke 2HR1 fractionally, though SPY "looked like" rejection from 2HR1 / SepR1 combo. 
NYA looked like mild pause from Q3R2.

These were about the only real points of weakness. QQQ has been lagging as mentioned in latest Total market view and likely first USA main index to break its monthly pivot on any further market declines. But for Thursday session, the level held. 

Safe havens in particular were very weak. VIX in 9s; XIV close above a quarterly level that could have rejected but didn't; TLT YP rejection; GLD SepP break.

It is times like these that a pivotally minded hedge fund could be hitting the NQ, and significantly reducing risk exposure with minimal cost to do so. 

SPY, SPX, NQ, TLT, VIX and XIV below.

9/20/2017

Exciting moves today especially in oil - highlighted in recent Total market view and this week's blog post as "could be worth a significant position" - and financials, "choice for additional longs."

Too bad I only have 10 minutes a day to devote to this project because EURUSD high is bang on YR2 and while I covered the $DXY in a recent post, didn't quite get to that in advance. Quick take - reversal looks for real.

This continues interesting mean reversion with QQQ lower, SMH hit from YR2, EEM & INDA down; yet IWM up, XLF up, DXY up, etc. 

With VIX dipping into 9s, XIV at resistance but no move yet; SPX above 2HR1, INDU soaring, XLF strengthening, GLD hammered, so far bulls still have the ball. 

SPY, SPX, USO and XLF below.

PS: SMH exit bar today, clear rejection from YR2. This has been on buy list after 8/21 with clear hold of AugP when most other USA mains and sectors had broken. 

9/19/2017

Power move continues with SPX lifting above long term resistance, and SPY joined in despite its the ex-dividend move on Friday.   

If we see selling after FOMC it won't be the first time but right now all risk trends are up. Additionally, XIV pause at resistance no rejection; IWM SepR1 test pause no rejection. 

On the flip side, VIX twice dipped into 9s to close above 10. 

Best guess from here is rotation theme - financials, small caps and maybe oil perking up, tech and maybe global leaders tech and China weakening somewhat. 

Total market view suggested move to buy into financials if TLT broke its YP is working very well, best move of the week across most asset classes so far. Oh yeah, out of GLD from buy rec 7/11 and sell rec 9/11-13.

SPY, SPX, XLF, GLD, VIX below.

9/18/2017

Bulls in charge, but SPX/SPY bar seems to be inviting sellers. 

Upside may be limited with weekly Bollinger bands in play on all 5 USA main indexes, but i think if market were about to put in a decent top and major drop then: TLT should have held its YP today, VTI would have stayed under its 2HR1 and XIV would not be advancing so powerfully.

Buying into financials working out for recent additions to risk as noted in the last Total market view, especially with TLT below its YP today. USO poked above its 2HP last week for the basically the 3rd time this half, and today it held as support. Typically I don't like buying anything below its yearly pivot, but in this case with tech weakening and oil perking up there is an interesting mean reversion play. Timing also supports this move per my Twitter posts of 9/1 from @thepivotalview. 

SPY, SPX, XLF, TLT, XIV and USO below. SPY & SPX 2HR1s with red arrows. 

9/15/2017

SPY looks down from 2HR1 level but ex-dividend, so cash index (and futures) telling the real story. As usual a lot more coming up on the blog. 

9/14/2017

Markets reached a maybe high today and I am basing this strictly on price action during session. SPY tagged its SepR1 and I wish to point out the similarities to the 8/21 bottom (where I also said "maybe low"). 

Monthly S1 / R1
2 hour chart RSI near extremes, with divergence
Sentiment (bearish 8/21, bullish 9/14) 
Weekly chart technicals - rising 20MA on the low, upper Bollinger band in play here
Timing 8/21 & 9/13 both on the list of more likely turn dates in Total market view (9/13 close high, and sometimes dates are +/- 1)

So why not?

Now, some additional factors -
SPX has been sold every time it gets near 18x forward earnings, about where it is now according to my 10 week moving average system - 2492
NDX leading down and actually below Aug close
TLT recovered YP - a big deal according to The Pivotal Perspective
GLD also rallied back to YR1 and erased the rejection

While some people will be thinking the market response will be the same as 8/29, I am thinking opposite. We'll see what happens. 

SPY daily as usual, weekly with moving averages and Bollinger bands, and 2 hour SPY. Arrows at AugS1 in green and SepR1 in red. And TLT - reclaiming its YP for the 3rd time this year. 

PS: In this brief daily comment, I have considered the market through:

Pivots
Other technicals
Risk vs safe haven analysis
Sentiment
Valuation
Timing

Which should be familiar, as these are the components of my weekly Total market view on the blog. Algorithms and so called quants are looking for specific isolated factors which turn into a back tested edge; I am considering the balance of clues over these 6 factors for likelihood of the next move. The quant method is reductionistic; this is synthetic and adapts to today's market behavior instead of over-reliance on backtests which often have little to do with the current environment.  

9/13/2017

SPY at 2HR1 / AugR1 and no sign of any rejection yet. SPX may want to tag 2500 for option expiration week. 

3 of 5 USA mains are testing pivot resistance levels so the question is blast through, pause and then up, pullback and then up, or simply rejection for a key high.

I would say TLT under its YP and GLD under YR1 argues for minimal damage to stocks. VIX and XIV are fully supportive of risk here. 

Rather than jump on hedges or shorts I think the play is to look for what is changing pivot status out of the blue. Oil, mentioned on my twitter @thepivotalview on 9/1 with potential for upside surprise for several weeks, is moving nicely (as is XLE). CL1 contract has been above all pivots a handful of times this year and has been disappointing for longs; however, this is the third time this quarter up near its D200MA and that could turn into support. On the ETF view, USO cleared 2HP fractionally today which is the second time since July that USO is showing any long term strength; and this occurred despite $DXY rally.

I've been "screaming bearish" $DXY since 5/16, and it has been below its monthly pivot every trading day since then. But a false break and rebound above the 2016 low of 91.92 has gotten a bounce going which is also impacting GLD and global indexes. I'm not sure how far this bounce goes, but there is potential to see weekly 10MA currently 93.13 or D50MA 93.45 if (IF) it can clear D20 and the SepP at 92.77. Since EURUSD is dropping from YR2, i think DXY move can go a bit further than other bounces the last few months. 

Returning to the safe haven theme - TLT below YP "should be" bullish for stocks, and convincing rejection of YR1 on GLD also points to strength on risk assets. However, 3 of 5 USA mains are already at resistance and portfolio is already in tech. IYF / XLF is a potential add along with USO (if XLF rallies above its SepP; IYF already above).

SPY, TLT, GLD, USO, XLF, XIV below. 

9/12/2017

Edge to bulls with all 5 USA main indexes, VIX below all pivots and XIV convincingly below all pivots. That said, sentiment on one measure has already spike to bullish extremes, and GLD and TLT are not giving the all clear just yet.

Current level to watch are SPY 2HR1, DIA Q3R2, and VTI 2HR1, along with TLT YP and GLD YR1. All charts below.

9/11/2017

On Friday, every safe haven that I track other than VIX indicated caution for risk assets, and today it turned out they were wrong. I rank this among days like pre-Brexit when "the smart money" is truly surprised by the market.

But today, all 5 USA main indexes back above all pivots, and this time XIV confirmed the VIX move by also moving above all pivots (fractionally but still). In addition, monthly charts had seemed to be on the way to reversal bars for the 5 USA main indexes, yet today 4 of 5 (excepting QQQ) went back to positive for the month. 

For a pivotal momentum strategy, it was a mixed day with evaporated gains in GLD, GDX and TLT if in that; while global favorites FXI, KWEB, EEM, INDA, and USA tech via QQQ & SMH, all bounced back.

GLD fell back under YR1, and GDX under 2HR1. Exits are trickier than entries. I don't like long term level rejections though sometimes after a brief drop the market comes back. This is why I also factor in higher timeframe charts and other technicals. One could be trimming both based on the move today; or give more room by holding a portion above all pivots and/or above rising moving average (for example, holding until 2 consecutive closes below a 10MA). Based on the weekly charts I'd say err on the side of taking gains with any additional weakness below GLD YR1.

SPY, GLD, XIV below.

9/8/2017

For 4 trading days in a row, SPY had resistance at Q3R1 (red arrow) yet held SepP (orange arrow) as support. One of these is likely to give way soon. As usual I'll try to figure it out on the blog over the weekend. 

9/7/2017

If you consider TLT and GLD to be safe havens (as I do) that are typically inversely correlated with risk, and if you consider volatility in currencies and rates a precursor or frequently correlated with volatility in equities, then it is difficult to understand the resilience of the USA main indexes today. 

SPY, QQQ and VTI each the third trading day in a row holding their SepPs. IWM also held SepP, yet had a fractional break of its Q3P. DIA has surrendered its leadership status that it enjoyed from late July; under SepP each day this month so far. Still, 3 of 5 above all pivots, 1 almost above all pivots, and only 1 really below a monthly pivot only. Not so bad. 

VIX - which I often prefer to rely on - is siding with stocks. XIV, which has also been a fantastic tell in many critical areas, shows some bearish concern compared to VIX by being under its SepP (VIX below SepP).

Bottom line here is I think stocks should be lower. Whether or not that happens, the easier money was long safe havens especially the metals which were highlighted here before the big breakout up. 

SPY, ESZ, TLT, GLD below. If SPY breaks its SepP at 246.07 (ESZ 2456), and/or VIX jumps above 12.28 again, then I think the sell-off will be ON.

9/6/2017

Market continues to be very resilient. I must admit - as of yesterday with SPY SepP testing, VIX 2HP / Q3P again testing, TLT & GLD soaring - i thought stocks would break down. Instead SPY held its SepP again for the 2nd day, and QQQ, IWM and VTI all held levels as well. VIX remained convincingly below all pivots. 

I am biased towards another drop for risk assets here, but so far it isn't happening. SPY Q3R1 is the level to watch for Thursday. Rollover day 9/7, so also check the new contracts.

SPY, ESZ and VIX below

9/5/2017

Most of the market was quite resilient today considering the move in TLT and GLD. VIX somehow stayed under its 12.28 critical level, and XIV held Q3P. Note to file though - another great tell on Friday by XIV by refusing to join USA main indexes above all pivots and VIX below all pivots. This was one of the reasons to not go fully long cited in the most recent Total market view.

SPY closed within .01 of its SepP; QQQ held, DIA broke, IWM held, and VTI held. Not bad! But TLT is screaming here with a major league hold of its YP. Major indexes look like a high test is in place, futures rollover on the way, and two of the world's craziest leaders are having a nuclear pissing contest. Erring on side of less risk despite the VIX move.

Interestingly, oil jumped above its SepP and Q3P, but faced resistance at its 2HP. It would be a very funny move for markets to see bond yields down, VIX up, oil up, and global indexes and USA tech down. 

SPY, VIX, XIV and TLT below.

9/1/2017

All 5 USA main indexes begin September above all pivots - quite an accomplishment from 8/29. As usual a lot more coming up on the blog.

8/31/2017

A mere 3 trading days ago, DIA and QQQ convincingly held their AugPs; as VIX managed to close below the critical 2HP / Q3P combo of 12.23 and XIV also held its Q3P. 

From there, fast rally to near highs on QQQ. 

Never ignore pivot holds. Meanwhile, TLT and GLD still strong. 

Severe internet issues so no charts tonight. 

8/30/2017

In yesterday's daily comment I mentioned the impressive holds of DIA and QQQ AugPs, and probably should have included the charts. DIA spent only 2 days below its monthly pivot in recent month of weakness and yesterday's hold was the tell. 

SPY and VTI (fractionally but still) joined DIA and QQQ above all pivots today. QQQ leading, and seems like we will see new all time highs by the end of the week! 

With risk appetite increasing and DXY firming, probably better move to take some quick gains on GDX and perhaps small SLV and rotate more into stocks. I will post more on DXY on the blog soon. If the low is for real, some of the global indexes (recently all 7 that I track above all pivots) may cool somewhat. 

SPY, DIA, QQQ, XIV below.

8/29/2017

I must admit at the time of last writing thought market was likely moving towards a -5-6% drop on SPX. Somehow VIX fell back under critical level 12.23, and both DIA and QQQ had impressive holds of their AugPs. 

Meanwhile, GLD saw selling from its near tag of YR1 as daily RSI reached overbought. Willing to give this a bit more room due to great entry from 7/11, but more recent adds on GDX and perhaps SLV are a tougher call.

ES had healthy rally up from the 4th test of AugS1 this month back to near the AugP. ES 2451 and SPX 2454 still the levels to watch.

SPX, ES, GLD, VIX below.