Total market view

5/6/2018 Total market view: "USA main index leaders IWM and QQQ finished the week above all pivots and MAs. SPY, DIA and NYA had (another!) test and huge hold of long term support: HP, D200MA, and NYA reached YP as well. Bulls have the ball."

Rally idea bang on - a bit stronger than planned but positioning long worked out well.

USA stock indexes put in one of the better rallies of the year last week after again holding long term support (YPs, HPs and D200MAs). This time the move was strong enough to turn medium term trends (QPs and MPs) up on all 5 USA main indexes. Bulls still have the ball, but these indexes have now run into a few major resistance levels that are worth watching - QQQ YR1 and IWM YR1 HR1 QR1 cluster. In addition, VIX is testing its YP. 

If VIX drops under its YP and stays there then I would expect indexes to be marching higher. But VIX hold of YP and QQQ drop from YR1 could be another decent trading top like 2/26-27, 3/12-13, 4/18, etc. 

XLE has had a great rally in just a few weeks after clearing its YP and back above all pivots on 4/11. But note that USO has reached YR2 so that could also be ready for a pullback. PS, last week's rec of SMH above the MP played out exactly as planned and more.

Global developed names joined USA indexes above all pivots last week - not by a lot but above all nonetheless. 

Global emerging participated in the bounce but remain relatively weaker - SHComp only above MP and below YP HP QP, FXI, EEM, KWEB below QPs; EWZ all the way down to HP on recent drop, still well under QP and MP; INDA also below all pivots except YP; and RSX, bullish to hold YP last week but still under QP. 

Still, all nearly stock indexes I track have held long term support levels. All bond categories are still weak, all 4 below all pivots. That said, TLT is within striking distance of recovering its MP which should that happen along with a drop from QQQ and VIX hold could be an interesting countertrend move. Metals are mixed with GLD relatively stronger but SLV and GDX not above their YPs.

Bottom line - if you followed recommendations of the past few weeks, you have been long oil, small caps, tech and most recently semi-conductors and did well on the recent rally. It is time to watch to lock in some of those gains, but if indexes continue to show strength then letting the trend play out further will be the right decision.

USA main indexes - QQQ YR1 and IWM cluster the levels to watch. DIA and NYA above QP means bulls get benefit of the doubt. 

Sectors of note - Both XBI and SMH barely positive for the year and not too far from QPs. Holding long idea only valid above the QPs.

Global developed - EFA also decent institutional tell, above all pivots from 5/4 on.

Global emerging - Weaker with several indexes below QPs and more. See list above.

Safe havens - VIX testing YP; VXX under all pivots for 2 days last week. Should VIX join VXX below all pivots then new index highs become more likely. Metals have been mixed for much of the year; a coordinated move (GLD, GDX and SLV above all pivots) would be an interesting signal but that hasn't happened yet. Lastly, TLT has quietly rallied as stocks went higher last week so counter-trend rally could have more to go. 

Commodities - USO high on YR2 so might be time to lock in gains if long. 

Currencies - DXY top on 2HP but now positive for the year so think it may try to come back.

Cryptos - BTCUSD barely hanging on to MP but otherwise below all pivots as QP exact on recent 5/5 top. Ideal BTC low for me is 3K area (YS1).

Mixed messages from various timeframes (Q, M W and D). Q and D suggest upside limited, M and W look healthier for the USA mains. Which will win? Not sure yet, but pivots are pointing to the bulls right now.

New high new lows also stayed mostly risk on for May despite flashing caution on 5/3.

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Helping keep bid under market as mentioned several times in recent posts, currently about 17X forward earnings according to my smooth 10 week moving average. 

Not at all too bullish.

April dates
4/2 - USA main index low, date listed per 3/18 Total market view
4/13 (mild)
4/18 - so far stock high
4/23 - 4/24 close low, 4/25 price low slight miss

Why do I quietly persist in this timing project? Because of 4 dates listed for April (from the end of March!) 

  • one was the low of the month across the board for USA stock indexes, and same date TLT high
  • the date listed as mild was mostly non event, perhaps a small pullback low on SPY and other stocks
  • 4/18 was the high of the month for stocks
  • 4/23 slight miss, 4/24 close low 2 weeks with 4/25 slightly lower lows

Not bad eh? 

May dates
5/6 (could be 5/4 session or 5/6 globex)
5/11 for currencies esp
5/15-16 area looks important change of character