10/24/2017

Today was an inconclusive day. While some would interpret mildly positive index action as bullish, today VIX closed above a monthly pivot for the second time since 8/21. Yes we know 8/21 was a low; but before that low VIX closed above the AugP on 8/8. That said, VIX is running into its D200MA and that will be the level to watch for Wednesday.

In case it isn't clear, here is my view:

I thought we would see a trading turn on INDU YR2 (wrong) or SPX YR2 (so far correct).
This trading turn probably isn't the final high for the bull market.
It still could be important enough to take action to lock in gains from August & end of September longs.
First suggestion index hedge on SPY / ES Q4R1 on 10/6 was small loss or scratch.
Next suggestions of safe haven longs on GLD from 10/9 was small gain or scratch.
More recent suggestion of QQQ short on day of highs is in the money.
Additionally, XIV short via UXVY triggered Monday is also in the money, and enough to have breakeven stop from here.
Weekend Total market view suggested safe haven capitulation ie TLT and GLD breakdown seemed more likely the next move; so far in process.
The main question here is whether we see a decent trading turn on SPX YR2 (since INDU YR2 rallied above); so far, TBD - maybe. As the market happened to trade during session exactly on YR2 level for SPX, a partial hedge could be appropriate (especially if not already in QQQ short or UVXY) and now can be held with no cost or extremely small cost depending on your stop tolerance.

SPY, XIV, VIX below.

10/23/2017

On days like these I like to asses the positive and negatives and then make a decision regarding positioning.

Keep in mind that I have been sounding caution alarm a bit too early over the past two weeks; safe haven longs ie GLD from 10/9 had chance for some minor gain that quickly evaporated; SPY hedges against Q4R1 were stopped out for small loss; but taking hedging positions on QQQ or IWM are working so far. (QQQ tweeted on day of the high from @pivotalmomentum.)

The USA mains:
SPX YR2 crystal clear rejection with no debate - might this be as important a turn as the 3/1 high, the 5/9 high, or 5/25-31 lows, or the 6/29 or 7/6 lows? Yes, it might!
INDU high on OctR2; still above Q4R2, YR2.
NDX Q4R1 rejection, still holding 2HR1
RUT YR1 near tag and rejection
NYA slight break of Q4R1; VTI between levels

Not the worst but given YR2 rejection on SPX, YR1 rejection on RUT, and Q4 rejection on NDX, bears winning. This will be even more so if current leader Dow breaks a major level, which hasn't happened yet.

VIX slightly above OctP; XIV broke 2HR1 (the level i said could trigger a trade in recent Total market view).

We won't have real trouble until VIX is more above at least one pivot and 'panic' only counts above the 2HP at 12.28. Also, the markets may come back to test highs. Based on above, i think any move up is limited to a high test, and we may see further downside soon enough.

SPY, SPX and XIV below.

10/20/2017

Indexes added on top of yesterday's strength. 

DIA soaring, SPY strong; QQQ and IWM still a bit stuck in comparison. But hey, a reliable Tweet said Dow daily RSI near one of its highest levels of the last 100 years. That goes for quarterly and monthly charts too btw. 

VIX gives some caution, refusing to confirm the index higher highs. But XIV agreed with indexes. Other safe havens, namely TLT, AGG, and GLD, look weak and ready to break down big.

As usual a lot more coming up this weekend on the blog.

DIA, SPY and XIV below.

10/19/2017

Bulls are patting themselves on the back today and well they should. The day started ugly with everything lower and VIX testing Q4P; and we know what happened from there. 

Current USA leader DIA even finished above its Q4R2
SPY also held Q4R1 as support
QQQ weaker - per my tweet of yesterday - and working for the bears
IWM while it could have been worse has been drifting lower for most of Q4 so far
VTI could have broken Q4R1 but rallied back to finish above; NYA testing level

VIX was the real tell, per my tweet this morning: "If mkt drop is for real then $VIX should stay above 10.97 and then in real -5% index scenario would be above 12.28." 

VIX dropped below 11 in a hurry and continued lower all day.

Tweeting from @pivotalmomentum usually near the open.

SPY, DIA, QQQ and VIX below.

10/18/2017

Markets continuing strong despite all the overbought conditions. A bit odd to see SPY nearly flat, DIA up .7% and QQQ down. Here's the quick rundown:

SPY above OctR1
QQQ pause at Q4R1 & OctR2 combo (more set up for a drop)
DIA launched above YR2 and made it to Q4R2
IWM back above 2HR1 slightly
VTI above Q4R1, NYA below = tie

Also watching IV that is nearing the next major level at 2HR2 for a market turn and counter-trend trade setup. VIX remains "off the lows" so this is a bit of a divergence to indexes. 

SPY, QQQ, DIA and XIV below.

10/17/2017

I must say the market is continuing a bit stronger than planned this week, with SPY lifting above Q4R1, DIA lifting above YR2 (key level!), and QQQ continuing above its 2HR1. 

But if I had thoughts about chasing long up here, forget it. VIX is now speaking pretty loudly. As loudly as it can, while remaining below all pivots: "Don't chase!" Smart money is starting to more seriously hedge.

I don't always have the backtests on my ideas but usually they are pretty well thought out. As it turns out here is a Tweet citing a study confirming - SPX up 2 days in a row with VIX also up 2 days in a row is bearish near term.

As of yesterday I said i was not pulling the trigger on big counter-trend positions with INDU above YR2, and so far that has been the right move. But i think a turn here is getting very close, and could come suddenly. Be ready. 

Although of course one could simply raise cash and buy a pullback, those with more bearish inclinations could think about index puts, volatility ETFs, IWM short, or other shorts in addition to safe haven longs on GLD and TLT that were suggested from last week. 

For Wednesday, watch SPY OctR2 155.53, any move back under INDU/DIA YR2 22937, then QQQ Q4R1 149.20, IWM 2HR2 149.24 (1 day break, leading down again), and VTI Q4R1 131.53. All charts and VIX below.

10/16/2017

I must admit the market is surprising me a bit here - Dow testing YR2, everything overbought, some daily charts overbought for days, and this would be a very likely place for a shakeout / drop. 

So far not happening and fractional close above INDU YR2 on both cash index and ETF. SPX closed above its Q4R1 by 1 point as well. 

GLD failed to recover above all pivots, another score for stock bulls; and HYG held Q4P. 

So far it's still risk on. I'm a bit skeptical but will avoid any big counter-trend positions until i see things moving the other way.

SPX, INDU and DIA below. 

10/13/2017

SPY looks a bit more positive with a close above Q3R1 but SPX clearly does not. 

As usual a lot more coming up on the blog.

10/12/2017

Market is still stuck on resistance but selling has been weak. I am still biased to some trading top there, though recognize that the first drop off highs likely to be shallow, followed by a high test of sorts. 

So far indexes are maintaining recent gains quite well. Keep in mind that the combinations of RSIs overbought across the board on quarterly, monthly, weekly and daily charts, along with Bollinger band overshoots on the weekly charts for SPY, DIA, IWM and VTI (all except QQQ notably), are historically quite rare.

HYG is something I've watched as risk-off indicator for many years, and recently started to mention more in the Safe havens posts on the blog. It closed just on its Q4P. If markets are going to put in a decent top here, HYG will be definitely under this level.

SPY weekly, SPY daily with pivots, and HYG below. 

10/11/2017

Readers of my detailed USA main indexes post on the weekends will see my comprehensive approach: cash index, ETF, futures current contract, and futures continuous contract. 

And today we have a perfect example of why I include all of these.

SPX cash index - under Q4R1
SPY ETF - above Q4R1 slightly
ES Z current contract - under Q4R1
ES 1 continuous contract - under Q4R1

So if you were just looking at SPY, you would have missed something important! This index didn't really clear Q4R1 and so my trading top call from the recent Total market view is still very much in play. 

All charts below. 

10/10/2017

In the Total market view I was pretty clear that I thought this week would at least be good for a trading top with all 5 USA mains on major resistance, RSIs overbought across the board, indexes overshooting Bollinger bands, and more.

That hasn't changed. SPY on Q4R1 and ready to drop. 

10/9/2017

So far markets moving in expected direction after all 5 USA main indexes tagged major resistance levels. But if you look carefully at both SPX and ES futures, so far it just doesn't look too bad as OctR1s held as support. 

Indexes are holding up quite well compared to VIX, which has lifted 15% off lows in 2 days. In addition, TLT continued up from 2HP hold and GLD jumped above its Q4P.

Based on the VIX move I'd prefer more downside for indexes before the high retest but so far after hours seem OK.

SPY, SPX cash, ES (Z), VIX, TLT and GLD below. 

10/6/2017

Trading top setting up on SPY Q4R1. As usual a lot more coming up on the blog. 

10/5/2017

Wow! After spotting all the bullish setups from 9/11+ (with maybe low identified on 8/21), and especially bullish from 9/29, several USA main indexes reached major resistance today.

SPY Q4R1 near tag
QQQ OctR1 and 2HR1 near tag
DIA Q4R1 tag
IWM YR1 nearish tag
VTI Q4R1 near tag

Market is heading up into 10/6-9 timing zone. Ideal move is a high on timing, then a shakeout. 

10/4/2017

More indexes on levels increases the chance of a trading turn here or soon, or at least a shakeout before resuming higher. 

SPY OctR1, with Q4R1 a bit higher
DIA 2HR2* and OctR1 nearby
IWM YR1* near tag
NYA 2HR2* and VTI OctR1

* = major level

Indexes up, VIX up and XIV down sets up a bit of divergence. It will be interesting to see sentiment surveys on Thursday but for now the recent ISEE and CNN Fear Greed are already quite up there.

I am watching XIV again and although not on a pivot again 100 seems to be resistance for this week.

SPY, DIA, IWM, NYA and XIV below with red arrows on the first levels mentioned above. 

10/3/2017

More points in the bulls favor with all USA indexes continuing up, VIX & XIV failing to reverse despite the chance to do so, and both EEM & EWZ joining the "above all pivots" party in a massive way. Oh yeah, FXI and EWZ both +3%. 

AGG did reclaim its YP though, and I'd rather that be below for pure risk on victory. But I won't quibble too much. 

If market is going to put in a decent top, what we are likely to have - the short list - is:
1. multiple USA main indexes at major resistance
2. other technical indications like RSI overbought or higher timeframe resistance
3. toppy sentiment
4. safe haven warnings
5. timing

Right now only NYA is at 2HR2. DIA is at OctR1, but i don't consider the monthy levels "major."
Other technicals are overbought, but markets are in power up mode as people who expected a Q3 correction didn't get one and are now piling in. Sentiment is getting up there not totally toppy yet. Most safe havens are weak. And no strong timing quite yet.

In other words while extended, the ideal top is higher than now. What would the ideal (trading not final) high be? 

SPX OctR1 / Q4R1 at 2543/2568 then YR2 at 2576
NDX OctR1 / 2HR1  at 6048 / 6068
INDU 2HR1 / YR2 at 22711 / 22937
RUT YR1 1518
NYA 2HR2 / Q3R1 at 12307 12388

SPY, EEM, XIV below.

10/2/2017

USA main indexes continue to power up, with all 5 above all pivots and above all MAs. Interestingly QQQ has turned into the weak link of the second half and so far this is continuing in Q4. Also, none of these are currently at any pivot resistance levels as IWM rallied above its 2HR1 today. Next levels up for most others are OctR1s, and then more important Q4R1s above that.

Safe havens are all saying bullish for risk assets: VIX continued lower, XIV rallied above its 2HR1 (a level to watch highlighted in the last Total market view); TLT all of a sudden under YP, Q4P and OctP, only saved by the 2HP. AGG fell below its YP slightly, though not yet enough to be rejection. GLD weak under its Q4P and OctP, with GDX same, and SLV below all pivots.

A few global indexes have weakened in pivot status as $DXY rallies. ACWI, FXI, KWEB and RSX remain above all pivots; EEM and EWZ below OctPs so far, and INDA has weakened as warned and currently below its Q4P. Actually, INDA is the only stock index I track that is below its Q4P.

$TNX just made its low of the year a mere 3 weeks ago, and has rallied back above its D200 moving average. Any higher and it will reclaim status of above all pivots, something it has enjoyed only a few trading days since April. If this scenario plays out, financials will continue to deliver up and metals will continue to drop. 

Back to USA main indexes - they seem a bit too good to be true here, and the more the crowd gets excited the more likely the momentum will slow and then fade. RSI on daily SPY is the highest since March. ISEE just put in its second highest reading of the past 12 months, only exceeded by 7/11/17, which wasn't really a big turn. But several other spike highs have been near decent trading tops. The problem is that no major indexes are against levels to hedge against, and the safe havens look terrible. If XIV dropped back under its 2HR1 i might try a trade on that. 

PS: I suggested a partial USO exit at minimum last week based on YP rejection. So far correct to have taken gains in USO. 

SPY, XIV, INDA, GLD, USO below. 

9/29/2017

Market closing out Q3 strong with convincing breakout above long term resistance for SPY. This is important as above 2HR1 opens the door to YR2 up near 258 on SPY and 2576 on SPX. 

SPY and SPX below, and as usual a lot more coming up on the blog. I have turned off the medium term quarterly and monthly pivots, since there will be new versions for Q4 and Oct respectively. 

9/28/2017

Bulls winning.

SPY above 2HR1, and SeptR1 for that matter; RSI not overbought
QQQ above SepP, slightly - but at least above all pivots
DIA lifting from Q3R1 support, not at resistance
IWM blast off above 2HR1, tagging Q3R2
VTI like SPY, and NYA lifted above Q3R2

VIX below all pivots from 8/22 on; XIV above all pivots from 9/11 on, and today fractionally cleared YR3. TLT sharp breakdown and GLD looks weak.

In others words, risk on. To emphasize, SPX very bullish above 2503 because it opens the door to 2576.

Global indexes haven't fared as well with the sudden $USD strength and rate jump. I recently emphasized XLF for additional capital but didn't hop on IWM.

Oil is perhaps the trickiest; i have mentioned this as candidate for upside surprise in the last few weeks which indeed delivered (most especially on XLE), but today it tagged its YR1 on USO which was soundly rejected. It may come back, but at least partial profits is right move and time will tell on the rest.

Lastly, consider that we are looking for definitive moves near the end of Q3 and beginning of Q4, and so far that looks to be USA indexes up, global indexes and perhaps tech weaker, rates up, metals down.

SPY, SPX, XIV, USO below.

9/27/2017

What an interesting day! Huge moves in rates, some emerging market names (INDA -1.7%, EWZ -1.8%), USA small caps (+1.9%!), and financials.

SPX & SPY made new price high but at the same time it appears close high was resistance. I think this is more a temporary move although we might see more selling into end of month. The reason I have to be bullish for stocks is how terrible the safe havens look - monster gap down in TLT and GLD weaker. VIX remains constructive for risk; XIV some negative reaction from YR3 but not as clear a reversal as 8/8.

Bottom line, bulls have the ball - excepting emerging market stocks suddenly feeling pressure from rising rates and stronger $USD - and though heading into Q4 have to be bullish, the next 2 days are a toss up.

SPY, TLT, XIV below. 

I'm now posting on twitter before the open - @pivotalmomentum 

From today: "Base case for Q4: rising rates, more stock vol, safe havens down. what to do? financials, short metals, add capital to indexes on weakness."