$SPX powered up through YR1 2830 as expected from recent posts and tweets. Path of least resistance is test of 2018 high. As usual more coming up on the blog.
8/2/2018
Yesterday's daily comment:
"Interestingly, momentum RUT and NDX are faring the worst as SPX and DJI are doing relatively better. So far SPX is acting like it will clear YR1. This would imply buyers soon stepping in for RUT and NDX. At this point I think worst case is a test of SPX AugP 2787 but that should be it. If RUT cleared its AugP then all 5 USA mains above all pivots and regular readers know I don't tend to argue with that kind of condition."
Today's SPX low was 2696 before a decent rally.
SPX SPY did not reach AugP, but ES futures did and the result was a massive hold. Similarly, NDX QQQ NQ opened a bit below AugP but had a massive move up. RUT IWM was below its AugP yesterday, but that too recovered. Simply stated today could have been completely different with monthly pivot rejections and breaks, but it wasn't - it was holds and recoveries. The day finished with all 5 USA mains above all pivots.
Additionally, VIX had a big rejection from the AugP. These VIX pivot rejections tend to bullish for stocks not just for one day but for several days ahead. If you examine the chart of this year you will see many examples.
The only things that would add to the party would be SPX clearning YR1, VIX more clearly below YP, and USO above all pivots.
SPX NDX and VIX below.
8/1/2018
I don't know why I have lost a few daily comments in recent weeks. Regardless I have been also tweeting and thankfully that posted:
"$SPX right at QR1 YR1 resistance 2822-2830 so looks like the next move is down, but with $VIX giving back gains I don't totally trust this candle."
So not much of a call yesterday anyway. As it turned out SPY again continued down from YR1 area, with most of the USA mains looking more bearish.
SPY YR1 pullback
QQQ above MP, but barely
DIA broke QR1
IWM below MP
But VIX just doesn't look too troubled here, even though it continues above its YP. VXX similar message.
Interestingly, momentum RUT and NDX are faring the worst as SPX and DJI are doing relatively better. So far SPX is acting like it will clear YR1. This would imply buyers soon stepping in for RUT and NDX. At this point I think worst case is a test of SPX AugP 2787 but that should be it. If RUT cleared its AugP then all 5 USA mains above all pivots and regular readers know I don't tend to argue with that kind of condition.
SPX, RUT and VIX below.
7/30/2018
Per the recent Total market view on the blog, the door was open for more selling and we got it.
Shifting defensive last week by taking profits or hedging on volatility or correlated shorts has paid.
SPX looks more like YR1 rejection, bearish
NDX continues HR1 QR1 rejection that began 7/26; depending on 7/31 could open below AugP, bearish
DJI fell back under QR1 slightly, bearish
RUT continues smackdown from YR2, looking like 3rd time the charm and now under JulP, bearish!
NYA ironically doing the best after months of weaker performance in international stocks
VIX continued up from YP
VXX also closed somewhat above JulS1, so actually this was the first in recent days that both VIX and VXX gave the same message
So bearish action across USA mains, especially IWM and QQQ, and XBI on the sectors, along with VIX / VXX confirmation - not a day to ignore. Given the combined message of the markets, it was time to de-risk even further.
However, SPY is threatened, but still just a pullback to a rising D20MA and likely above AugP. USO and XLE current total pivotal momentum leaders, and XLF also benefiting from bond drop. If XLE and XLF hold up, SPX will not drop that much. I'll be carefully watching AugPs on Wednesday for status.
SPX and VIX below.
7/27/2018
Posting limited this week due to travel. Back on regular schedule next week.
On Friday SPX fell back under the key cluster I have been mentioning the last several weeks, QR1 YR1 2822-2830.
NDX fell hard from its HR1, and RUT continues YR2 smackdown.
VIX is lifting above its YP.
The market may make another attempt to clear these levels but per weekly chart configurations, door is open to more selling.
7/25/2018
Wow. Despite the setup for a trading turn yesterday, SPX powered above its YR1. As long as this level holds as support the next target area up is 2876-83.
VIX still holding YP makes me question the pure bullish melt up scenario.
NDX reached HR1 but NQ sharply lower after hours and looks like rejection.
SPX and VIX below.
7/24/2018
Today the target areas I have been mentioning for most of the month tagged on SPX and NDX. SPX in particular was kind enough to top within 1 point of the YR1, actual level 2830.67 and the high today 2829.99.
However, RUT got slammed with a massive rejection of YR2 for the 3rd time this year, and VIX held its YP. The other earlier leader this month, XBI, also gave back gains.
If you have taken all the longs I have mentioned at least QQQ, SPY, XLF and INDA helped make up for this. If you were sharp it was clear that both IWM and XBI weren't rallying early in the day.
I have also mentioned that if we saw VIX plunge through its YP then it might just be better to hold all longs. But if that didn't happen, then I'd be taking action to take profits or hedge.
Sometimes it can be hard to tell what is a pause before a blast through or what is a real turn. Regardless the better thing to do here was reduce long exposure by protecting on IWM and/or XBI; hedging via VIX longs; or hedging on IWM shorts if you spotted that move fast enough.
If you are doing less in and out, and simply holding long with a minimum of action, you might want to give this room and hold above AugPs as sentiment isn't that toppy and daily & weekly charts aren't overbought. However, let's be clear - 3 yearly levels in play, SPX, RUT and VIX. Also, both NDX and NYA tagged QR1s, and DJI was a just a small miss. 4 of 5 USA mains on resistance plus VIX is enough for a trading turn.
SPX, NDX, RUT and VIX below.
7/23/2018
Although indexes started red and VIX higher, VXX could not clear its JulS1, main index leader IWM held its WP and then the rally was on. Midday SPX and NDX reclaimed their WPs and finished above.
Overnight looking good to reach target areas so it will be an interesting decision tomorrow. Hold for higher, hedge out or take gains?
Let's take it case by case - if RUT has any chance of clearing YR2 it would be better to hold. NDX also has room to go to YR2. SPX QR1 YR1 2822-2830 has been the target area I have been pointing to for weeks, and I don't think it will power straight through it. This is especially the case if VIX remains above its YP. If VIX YP crumbles, it might be better to hold all longs for more gains.
SPX and VIX below.
7/20/2018
Hm, I seem to have lost some daily posts this week but coincidentally have been starting an abbreviated daily version on Twitter.
Mild selling again today, but VIX staying above the YP for the 2nd consecutive day.
Also, DJI had clear resistance at the MR1.
I'm still pulling for the SPX to reach my target zone of 2820-30 but wondering if 2816 may have been close enough. As usual more on the blog over the weekend.
SPX, DJI and VIX below.
7/19/2019
SPX doing fine, but VIX above its YP is now more suggestive of a trading turn. Time to pay attention.
That said $RUT back at highs, now testing YR2 for the 3rd time. As it has already declined from this area twice, seems like it could try to clear as next move.
SPX, RUT and VIX below.
7/17/2018
7/8/2018 Total market view: "But right now I have to be pretty bullish here and simply thinking the since SPX just held major support it is likely heading to major resistance, and that level is 2830."
That was written at 2760. Base case since 7/8 has been a move to SPX 2820-30 and that is a lot closer to happening. The next big question is what happens at that resistance cluster (QR1 / YR1).
VIX closed fractionally below the YP today, joining VXX below all pivots. If that condition maintains we might even think that SPX will clear the 2820-30 area. Glad the target area is approaching; now the task will be to assess the likelihood of a decent trading turn. For now tag of 2820-30 on track.
SPX and VIX below.
7/16/2018
Weak selling in SPX and VXX below levels both suggest market will go higher. Also, NYA held HP when it could have broken.
That said some of the leadership is fading - USO, IWM and XBI taking hits as well as NFLX and NQ after hours.
VIX held YP today so this is again a hedging possibility, but with VXX crumbling the actual message of volatility is conflicted.
SPX and VIX below.
7/13/2018
Bulls in charge. As usual more on the blog over the weekend.
Base case SPX heading to YR2 QR2 area at 2820-30.
7/12/2018
Several USA main indexes opened above levels today -
SPY above MR1, looking on track to move to YR1 target
QQQ above MR1, heading towrads QR1 HR1 YR2 cluster
DIA back above HP
NYA back above HP
Oddly IWM, the star of Q2, not joining in the party.
SPY and QQQ below.
7/11/2018
Today was mostly bearish.
DJI and NYA broke under their 2HPs. DJI was fractional but still. Having all 5 USA main indexes above all pivots was part of my idea for higher highs in leaders IWM and QQQ, and YR1 test for SPY.
IWM dropped from YR2 / JulR1 combo, and QQQ JulR1 looking like resistance.
VIX and VXX moved off the lows, so the hedging move suggested two days ago has paid somewhat.
Further, XLF gave back gains and finished under QP, and XLE got whacked along with oil. SMH also broke back under its MP and testing its HP QP combo along with D200MA. A breakdown there could be a big whoosh so watching that now as a re-entry short.
But somehow SPX / SPY just doesn't look too bad. JulR1 varies slightly per cash index, ETF and futures - as I type, ES back above JulR1 at 2780.
Bottom line - if you have been following along then some positions are still OK but others saw gains evaporate. Regardless, with all these bearish events it is better to be less long and still have the volatility hedge. The main question is does the market turn right here, or will we see higher highs in IWM, QQQ and SPY. Jury is out - but definitely less likely with DJI and NYA back under 2HPs.
SPY, DIA, XLF below.
7/9/2018
Very bullish action today, with both DIA and NYA reclaiming status of above all pivots. DIA was fractional so better to see that maintain above.
In addition, no slowdown at SPY, QQQ or IWM MR1s.
These are all encouraging signs to be holding fully long and waiting for higher level targets. The XLF, XLE and INDA setups I mentioned on the blog were great additions to any buys last week. Further, EEM added to risk-on signaling by recapturing its YP as well, and FXI seems will have a chance at that tomorrow.
The next levels to watch are IWM YR2 and VIX YP - given the pace I expect that these to resolve in bullish fashion. But if IWM YR2 has major rejection, DIA fades back under its HP, and VIX holds YP, then I may lessen long exposure with a volatility hedge or DIA short.
DIA, IWM, XLF, XLE and VIX below.
7/6/2018
7/5/2018 Daily comment: "SPY tested its MP today, which means anything higher and it will be back above all pivots. This is especially notable as ES was again testing its HP earlier in the day. Combined with leader IWM back above all pivots, and VIX closing below YR1 and MP, give the edge to the bulls."
Ding! Long leaders IWM and XBI already above all pivots on 7/5, along with increasing long exposure in general, did well today. For the last 2 weeks I have said to increase cash and watch for good setups near the quarter turn. On Day 1 of Q3 SPY tested and held its 1HP when it could have broken. Day 2 MP was resistance but HP continued to hold. Day 3 tested HP again on the ES contract and rallied big to finish at or slightly above the MP (depending on cash, ETF or futures view). This was the tell. Next move launch!
As it so happens, on the 9:30 15 min bar SPY closed above its MP and VXX closed below its MP, making that below all pivots again. I don't really know of a better system for levels than this.
SPY and VXX below, both daily and 15 min charts.
7/5/2018
SPY tested its MP today, which means anything higher and it will be back above all pivots. This is especially notable as ES was again testing its HP earlier in the day.
Combined with leader IWM back above all pivots, and VIX closing below YR1 and MP, give the edge to the bulls.
SPY, ES D, IWM and VIX 2H (to see the MP level) below.
7/3/2018
Yesterday, I noted that the market wasn't yet speaking with a unified message. My larger view remains 'upside limited along with risk increasing' due the topping nature of several quarterly and monthly charts.
In addition, several indexes now have long term pivotal weakness - something we have not seen since early 2016. Specifically, DIA and NYA among USA mains and XLF and SMH in the sectors I track are now below 2HPs. This is happening as there is widespread weakness in international indexes and especially in $USD denominated ETFs.
Today:
SPY JulR1 rejection, still above 2HP
QQQ JulR1 rejection
DIA QP rejection, below HP and JulP - and D200MA selling
IWM JulR1 pause
NYA JulP rejection and QP slight break
VIX JulP hold
So this doesn't sound terrible, but today the leaders could have rallied above all pivots then didn't. DIA could have recovered above its QP but didn't. I'll be watching the SPY / SPX / ES 2HP combo, because anything below that tips the scales on the USA mains from 2/5 weak to 3/5.
TLT has already decided, moving back above its 2HP today so that is the first long term strength since the end of 2017.
PS: Despite the BTCUSD bounce from about 5800 to 6600+ in 4 trading days, it remains below all long and medium term pivots.
SPY, QQQ, DIA, TLT and BTCUSD below.
7/2/2018
I'm looking for clear setups and while there are in some cases the market isn't speaking with a unified message yet. Close, but not quite.
DIA and NYA opened below HPs! This the first long term weakness in any USA main index since early 2016.
However, SPY could have broken HP but rallied instead to stay above (arrow at 2HP in chart below). In addition, VIX dropped from QP and finished slightly below MP as well.
Leaders QQQ and IWM look strong would recover above all pivots with one more push higher.
The bifurcated market still in play with leaders QQQ and IWM about to go full on bullish, while the more internationally influenced DIA and NYA are pivotally weaker than they've been in about 2.5 years.
These are the levels to watch - QQQ MP, IWM MP, DIA QP, and VIX MP.
This site has played bonds very well this year but I didn't think Friday was the long exit. For now TLT less strong than could be since a finish below HP when it could have held. Still above QP and MP though.
This is echoed by XLF huge hold of YP.
Bottom line historical tendencies of the July 4th week so far playing out. A bit higher in indexes and lower in VXX would look like bullish resolution and the kind of setup I am looking for. For now, somewhat more long (and taking gains on some speculative shorts) seems like the right approach, and ready to add further if leaders close above all pivots tomorrow.
SPY, QQQ, IWM and XLF.
