Last week: "Bullish on USA stocks is the correct view after the Tech set and NYA jumped back above YP / 1HPs. Now I will be watching the RTY / IWM YP and HP. If that clears along with further safe haven weakness, full on bullish USA stocks. However, that may not happen; we could see the rally stop cold on the RTY / IWM YP as the safe havens hold Q2Ps areas.... And of course, we'll have new JunePs which look to be supportive for USA indexes and somewhat bearish for safe havens."
So far RTY has tested its YP area and paused; but not a clear and not a rejection either. INDU held its JunP near exact for all 3 days of June thus far. Yet TLT jumped its above JunP from the start of the month and blasted off from there. On Friday GLD back above all pivots as well.
With the strength in 2 of 4 safe havens, I am a bit less bullish on USA stocks and think risk of some fade from RUT / IWM YP area has increased. At the same time, all 5 USA main indexes are above JunPs and VIX / XIV area unconcerned so one cannot be too bearish either.
This is an odd market and it will probably resolve at some point - ie stocks in rally mode as safe havens drop, or stocks lower as safe havens lead and VIX / XIV shows trouble as well. Until then, perhaps we should expect choppy sideways in most assets and look to the best momentum moves for gains. Right now that is TLT across all timeframes. I pointed out SOXX many times earlier this year, and though INDU has stopped leading USA on the upside SOXX has been great, most especially on the rally from the May lows.
On USA mains we are watching the RUT / IWM YP and 1HP area, and then the JunPs with INDU / DIA already testing 3 days in June.
The big pivot development was the TLT blast off after holding Q2P again then starting June above its monthly pivot. Looks like test of YR1 / 1HR2 area on the way. GLD also had a massive jump on Friday and back above all pivots. Strength in safe havens usually puts a lid on stocks at least.
Yet VIX & XIV remain undisturbed and still look quite bullish for risk. Watch the JunP on the VIX, and YP / 1HP area on XIV.
Simple idea - look at the slope of the 20MA on quarterly, monthly, weekly and daily charts across various indexes / ETFs. What looks the best? TLT.
Valuation and fundamentals
While not preventing a move to test 2015 highs, I think these are still putting some upside limit on USA indexes. See today's post for details.
No edge here with no extremes on any of the 4 readings I track.
INDU respecting the 5/26-31 turn area so far, though SPY and QQQ bit higher on 6/2. Turn areas for June (no change from last week): 6/7-9, 6/13-14, then 6/28 (mild).