REVIEW
4/30/2017 Total market view: "Market is really a toss up here, so we will see if MayPs hold for USA main indexes this week. If so, will maintain positioning. Even before the rally last week thought this leg would not have the same gains as Nov to Dec or Jan to March for USA indexes. But if MayPs hold there is the chance we see the higher target levels listed above."
Result: MayPs held across the board for USA main indexes, and all excepting IWM finished slighly higher, with tech again delivering the best gains.
SUM
The trend is decently up with 5 USA main indexes above all pivots. 4 of 5 of those are above all daily moving averages as well, with only the 10MA missing on IWM. Sentiment is not too toppy, though ISEE had a recent spike high on 4/27 which often limits upside in weeks ahead.
Safe havens are confirming risk on - VIX back under all pivots 4/24, XIV above all pivots 4/24; and TLT, AGG, and GLD faded from April highs and have been below MayPs.
The market had already decided the French election result and it seems in this case it was correct.
But valuation at 18x forward earnings remains a potentially limiting factor, and SPY set is heading into YR1 / 1HR1 major resistance, and QQQ set heading into YR2. These are significant levels and how market reacts will be very telling. A significant top on these is very possible given seasonality and valuation, but anything above would be very bullish. Main task for the week is to judge whether risk will continue to power up or if a top looks likely then better to hedge or reduce.
Bottom line
Trends are up for risk but SPX and NDX heading into major pivot resistance levels which is where important turns can happen. I'll be observing market action from these levels and then taking appropriate action - holding leveraged long if any strength above, reducing if any rejection.
Positioning
120% long though QQQ would have been much better choice (again) than recent SPY or IWM longs.
PIVOTS
USA main indexes - watching SPY YR1 and QQQ YR2, and on the other side, IWM Q2P / MayP combo.
Safe havens - Looks like TLT, AGG and GLD will be testing levels soon, part of the tell for risk.
Sectors of note - A long term investor taking into account YP & HP only with an active allocation approach would have shifted to underweight XLE from 2/13 week with a weekly close below 1HP. Last week had a fractional close below YP as well.
Global indexes - China weakening via FXI and SHComp, but ACWI, INDA, EEM and KWEB still doing great. Best performer of the year? India small caps. I'm serious. But EWZ and RSX both vulnerable with oil drop.
Currency and commodity - DXY remains below all pivots, allowing global indexes to outperform. Oil held YP on CL1 contract last week, so this is level to watch from here.
OTHER TECHNICALS
Advance decline volume difference is trying to turn up on daily and weekly charts.
Note: RSI already overbought for USA main index quarterly and monthly charts, now weekly and daily approaching overbought as well. Next week higher with indexes stopping at 70 area RSIs while tagging YR1 / YR2 resistance on positive sentiment would set up a decent top.
VALUATION & FUNDAMENTALS
Not helping. Based on these, slim chance that SPY powers up above YR1.
Timing
(Proprietary work in progress model)
May dates published in 4/30 Total market view
5/3-4 - so far stock index minor pullback low on 5/3
5/19 (stronger)