If following along coming into last week long DIA and SOXX, maybe EEM, maybe runner portions oil or oil related EWZ / RSX left to hold above Q2Ps, and decent GLD/GDX position. Strategy suggestions did a nice job avoiding stock pullback damage with TLT and especially quick VI futs trade idea along with XLF and possibly other shorts, but GLD/GDX got whacked, sorry. That was rather out of the blue and even though looked like holding YR1 as support had a big gap down under the level.
We are heading into quarter end and new Q2 so in addition to pivots I try to guess the likely institutional re-balancing move. I don't always get this right - wouldn't that be nice! But be aware that starts of quarters can see sudden new directions as the window dressing period is over and there is re-balancing going on. Where might this happen? As the week unfolds I might post a few longer term charts like quarterly (Q) and monthly (M) standard view Bollinger band and moving average charts on several asset classes as well.
With exception of biotechs most USA stocks are about flat so nothing screams re-balance to me. But TLT and GLD/GDX on track for large quarterly gains. GLD/GDX just starting new up move or bounce in downtrend depending on your view, but TLT up there near highs. So that is the question - will institutions sell bonds and put that money into stocks, or be selling stocks and buying bonds? I don't have strong opinion about next week other than i "think" the window dressing move should continue the emphasize asset classes that have done well on the rally, so small caps, oil & related, some emerging markets, and the USA leaders DIA and SOXX (doing much better than QQQ and IBB this year). Then I am wondering about TLT getting hit in the new Q as institutions sell again before any rate hike threat while TLT has the gains and toppy considering Q and M chart view. If oil rallies into quarter end it maybe vulnerable to a drop in Q2. But really just guessing here and we'll go with the pivots.
If you took off VIX hedges and closed some shorts on Friday portfolio is back to mostly long. Or if keeping any shorts, XLF looks best to hold and if in EEM I suggested FXI as hedge and that is OK to hold too. Mostly long works on DIA and SOXX but really looking across USA mains, Japan and EU, then emerging market group there is no reason to have massively 100%+ long all in portfolio right now - ie, most stock indexes are still below long term pivots! So we can scan for the weaker indexes to possibly re-short, so that means IWM & XLF on USA side, possibly IBB but that could be getting about done, then clearly SHC (Shanghai) and FXI are the weaker indexes on the global side. Both NKY and DAX remain quite weak as well. If the Tech group (NDX COMPQ QQQ NQ) goes to more bearish with NDX break of YP, then it might be better to take the gains on the comparatively recent SOXX longs and free up cash for other ideas.
Not sure what to do about GLD / GDX here. The slam was large and sudden and monthly pivot just below, so thought maybe just hold above that. But now both weekly charts look like YR1 rejection which is potentially quite bearish.
The other things I've said in various places and will repeat here - if you took some gains on oil related, and out of TLT, put some shorts on and took off last week, then depending on GLD position you might have portion cash on sidelines. This is OK - you don't have to have 100% in all the time. In fact often quarter end and new quarters are ideal places to have more cash so you can go with the new move. But I am not talking about 50% cash or anything, if we carved things up into 20 units then you could be long with 8 DIA and 2 SOXX, then 4 GLD and 1 GDX (if still in full position), 1 EEM, .5 each EWZ/RSX leaving 3 units that you used for VIX, TLT and or XLF positions last week. Maybe use margin at times for a few extra units as hedges or good opportunities, let's say another 5 units so that's not too crazy if portfolio goes up to 125% total exposure. If GLD forces us out then that's OK, we'll have a new setup soon enough and maybe it will be better to be more long stocks or more short, we'll see.
In the very near term on USA indexes, watch if SPY and NYA can again get green on the year. Both QQQ and IWM had too big a drop to do this, and DIA is already well into the green. On several indexes this year there was a rush of buying when it was clear the index was getting green.
Bottom line I don't have a list of things like last week. I don't know which way the market will go. Momentum looks like DIA and leaders should test highs but that is just a bias. We will have new Q2Ps soon enough and sudden moves often start at the start of quarters as institutions adjust. That is what we are looking for.