Total market view

This is a new tag as of today attempting to summarize the components of my total market view: 

1. Pivots
2. Other technicals
3. Valuation & fundamentals
4. Sentiment
5. Timing

Pivots are always #1, but the other categories just depend on the context. Sentiment can be middling until we see an extreme, and similar issue with valuation and timing. 

See the other posts today for USA main indexes and safe havens. 2 indexes had bearish developments, and 3 of 4 safe havens were bullish (counting XIV inversely). NDX breaking YP is a big deal, because tech stocks are the real favorites in the market and the NDX pivots held at all the crisis points in the 2009-15 bull market. Also RTY / IWM failed very near its YP / 1HP combo.

Now anything can happen, and perhaps things change back to bullish next week, but right now the stock indexes are shaky. Any index trading below its MayP will be subject to further declines and likely test the MayS1. 

Other technicals
Several USA main index daily RSIs were officially overbought (70+) or near it (67.50+) approximately 3 dates or clusters. 3/17, 4/1 and 4/20. It is normal to have some move to work off the overbought condition. Whether that is deeper re-tracement of the rally or sideways digestion period remains to be seen. 

Valuation & fundamentals
I've been bullish on stocks as indexes cleared their YPs again, but at the same time was consistently pointing a likely valuation cap. It wasn't a new point but most clearly summarized here on 4/9:

"Point remains: we have a real valuation concern as I don't believe SPX will trade much above 18x earnings especially before election matters are settled. This currently stands at 2116 but has been moving considerably lower even in the last 6 weeks when I have resumed tracking markets this way. On 3/11 18x forward earnings was 2176! This means earnings are being adjusted lower. And with the Citigroup report, nothing is surprising economists to upside. Together these put a real cap on further USA gains."

In addition, I pointed to sentiment getting to an area of concern twice in April. 

4/21: "...the easy money from February - when we saw sentiment extremes on the other low side - has been made. With market participants so bullish, the market is more susceptible to a larger pullback or range bound digestion period."

4/7: "So given these three together, I think there is same warning for the market. It may not be 'the top' but perhaps this points to recent highs as potentially more important than pivots would currently indicate."

4/8 was near a 4/7 turn, and 4/28-29 may be a pullback low for stocks. There are two areas of May to watch, 5/9 and then 5/26-31. I don't think both will be highs.