11/4/2017 Total market view: "While it is possible to have trading turns on quarterly levels - SPY, QQQ and NYA all at Q4Rs right now - in my view clearing long term resistance as SPX did last week is the larger positive because now this can act as support. ... HYG has anticipated several stock drops in the past, so currently below its Q4P is some warning for stocks. That said I'll stay fully on the bull side with SPX above 2582. If one wants to reduce risk, IWM is a hedge candidate. Also, if we see more DXY strength and global weakness, i may hedge current FXI and INDA longs with an EEM short."
Result was most stock indexes closed lower for the week, but SPX still held YR2 / 2HR2 levels 2576-2582 as support.
There are a few cracks for the main indexes. VIX above a monthly pivot is fairly rare this year, and XIV fell back under a long term resistance level. Indexes themselves are in varying states according to The Pivotal Perspective: Dow between levels, NDX testing YR3, SPX still holding YR2, and RUT already dropping from YR1.
It is a week to be agile, because anything lower on SPX would invite a quick trip down to NovP at minimum. But if 2576-82 continues to hold and VIX drops back under NovP then might as well be more long.
If we put on our max pain hats we might think that 1) emerging market currency volatility will continue (because FXI, EEM, INDA have done so well this year), thus causing further pressure in most of these top performing names; 2) NDX will top out at or near YR3, and 3) the generally disappointing RUT and maybe XLF will rally off the recent lows.
Bottom line - I think upside is limited, but I don't rule out a fling up towards highs before another drop. Watch NDX YR3 to lock in gains. Also keeping an eye on XIV under 2HR2, which is both an indicator and a possible trade trigger on UVXY. Global names are looking a bit shaky excepting portfolio winner FXI; EWZ mentioned previously as weaker has been working as a hedge, or one could simply reduce exposure.
USA main indexes - Indexes varying more than most of this year.
Safe havens - Though bonds and metals weaker, volatility increasing. Volatility has been the better tell on risk assets for many months.
Please see my twitter on new highs / new lows and McClellan Oscillator.
VALUATION AND FUNDAMENTALS
Again over 18X forward earnings which is, in my view, only due to promise of corporate tax cut.
Currently quite mixed. Equity-only put call just off lows, but general put-call (includes indexes) near relative highs for the year.
As it turned out, 7 dates provided for August. 2 were the high and low of the month. 2 were the second high and second low of the month. 2 were milder turns. 1 was non event.
9/4-5 - 9/4 mild pullback low
9/13 - QQQ high and TLT low
9/22 (+/-1) - stock index high 9/20 (miss)
9/26 - stock pullback low 9/25 (-1)
9/29 - non event
October dates (listed from 10/1)
10/6-9 - 10/9 mild pullback low
10/19 - pullback low
10/23-26 - 10/25 pullback low
11/19-20 risk off
11/22 risk on