2/29/2016

SPY and ES again down, yet above the FebPs. But that's over and now the MarP levels are what matters.

QQQ dropped from its FebP today with a clear rejection. I must say the pivot change-over periods is one of the trickier parts of the method. Do you take this as a short signal, when the level is no longer in effect as of the close and the next MarP should be about 100.70? Doesn't seem like it to me. But then again rejections on 12/30-31 2015 did very well. 

IWM also rejected its YS1 today, which could have turned into support, so that's a point for the bears. From the weekly strategy sum: "We'll carefully watch what happens at the big levels like RTY / IWM / TF YS1s...."

So far any further shift into bounce scenario and reduction of safe havens after 2/22 has been a mild mistake (although buying 2/12 and then 2/16 both right idea and chance for some gains). GLD in particular would be very bullish to maintain above its YR1 117.94 for the second close now. Per my timing bias I'm ready to add back to full safe haven positions and shift stock longs into shorts, but think best is to wait for a clear setup.

As of now the main USA indexes will be dropping onto their MarPs which should be some kind of support. What looks more clear is DXY above all pivots and EUR below all pivots so those into currency trading should take a look at the MarPs tomorrow. 

2/26/2016

Not much change from Thursday; above the FebP. One more day of February pivots, then we'll be on to new March levels.

While I tend to emphasize the yearly, half-year and quarterly pivots above the monthly, it has been a decent enough guide to action the last several months. More on this soon in a blog post. 

2/25/2016

From yesterday: "...if we see SPY maintain above its FebP, ES above 1925 and SPX above 1930 (cash index not yet) then that will be bullish. ... As of yesterday I went mostly back to bear playbook from the bounce idea, but the market may force the bounce plan yet again. If so then way to do it is reduce on full safe haven positions if they show rejections from major resistance and put into the USA leaders DIA and SPY that are above the FebPs (obviously, only if that is the case). Or accept the chop and cut any shorts from 2/23."

So clear score for the bulls today with SPY / ES / SPX all lifting above its FebP (again) and some stall at major resistance in the safe havens. Let's say you were on the bear playbook and shorting (not just big TLT long) and came into today like this:

5 TLT
4 GLD / 1 GDX (or 5 GLD)
3 FXI shorts, 1 QQQ short, 1 XLF short for 5 total
3 DIA longs
1 BTCUSD long
1 flat

This is total of 75% safe havens or short, 15% long, 5% uncorrelated and 5% flat. It is just not that hard to shift to a much less bearish portfolio with a few simple changes.

Cut recent USA shorts and put into DIA / SPY as suggested. Perhaps even reduce FXI short by 1 with ACWI poking above its FebP again too. 
Reduce TLT and GLD (basically the add portions) by 2 each. Then just a question of how much to add long.

3 TLT
3 GLD
2 FXI shorts
3 DIA longs + 2 DIA added today + 3 SPY longs also added, holding above FebP for now then MarP to judge
1 BTCUSD long, uncorrelated
DXY / EUR idea from the blog today did not trigger
so we have 40% safe havens or short, 40% long, 5% uncorrelated and 3 units or 15% cash. 

Cannot be too bearish with SPY and DIA above the FebPs and right now on track to open above the MarchPs. If or when they do break, it will be back to bear playbook ie cut longs and pile back into shorts and safe havens. 

2/24/2016

If there was ever a day that illustrates the importance of waiting for the close to take a signal, that was today. On the open it looked nasty with a break of the FebP and WPs across the board, but by the end of the day SPY and DIA managed to hold their FebPs, and VTI reclaimed what had broken yesterday. 

It also shows to know where the big cash index levels are, as there was massive buying from SPX YS1 1895 (LOD 1891) as oil held its 1HS1 on the current contract as well (see this post for the level). 

Now what? SPY / ES / SPX has been chopping without a clear move on the FebP. Both the cash index and futures rallied to but not through the level on 2/17, then had two days of mild pause that didn't look like rejection 2/18-19, one day that jumped above and appeared to buy on 2/22 that turned into fake-out; then a drop under the level that was met with buying today. Where has market gone in that time? About nowhere. Although safe haven trades TLT and GLD are higher than 2/17 and have been easier to simply add back on the pullback and hold.

I don't know what happens with stock indexes tomorrow but if we see SPY maintain above its FebP, ES above 1925 and SPX above 1930 (cash index not yet) then that will be bullish. If you are an active trader and loosely following positioning, then check this post.

As of yesterday I went mostly back to bear playbook from the bounce idea, but the market may force the bounce plan yet again. If so then way to do it is reduce on full safe haven positions if they show rejections from major resistance and put into the USA leaders DIA and SPY that are above the FebPs (obviously, only if that is the case). Or accept the chop and cut any shorts from 2/23. 

2/23/2016

I don't claim perfection here. That would have been taking a massive position of out of the money puts on 12/29/2015! Or going flat or short USA stocks on 11/3/2015 and shifting back into TLT the next week! Good luck finding that consistently. But I've done a pretty good job of staying on the right side of the market:

Alerting to key low chance from 9/29 and bullish USA stocks from early October;
While staying bearish emerging market stocks;
And getting the key USA pullback low in November.

At the end of 2015, I was probably a bit too focused on where the next pivots would be and didn't pay as much attention to the last 2 days trading as I should; note for next time. But several successes: 
Recognizing real trouble 1/4-7, targeting SPY 186 from 1/6 and shifting into TLT, and adding;
Getting the GLD move, and adding;
Two turn alerts near the lows 1/20-22 and 2/11-12, including oil, both good for USA and/or emerging index short covers;
Chance for some gain on recent INDU/DIA, RSX, EWZ and EEM recommendations, playing the bounce;
and lastly, BTCUSD has faded but still a gain.

But yesterday was not one of those times, sorry. If you added anything yesterday it looks like a mistake. Markets had held FebS1s and this was the second time above the pivot on SPY, DIA and VTI; usually the second time move above definitive. Not this time. Looks like some of the filter ideas I typed up would have helped here too. Keep in mind though, that the primary buys were DIA on 2/12 then a combination of the emerging markets on 2/16. Yesterday would have been the third long addition (my choice SPY to keep separate from the DIA position) with quick out today. 

Now what?

SPY literally closed on the FebP to the penny, but ES and SPX are back under. DIA & YM still barely above, INDU fractionally under. VIX and VXD don't look good (more on this soon). VTI and ACWI, the institutional indexes, back under FebPs, bearish. Basically market hanging by a thread on what's left of the SPY FebP and the DIA / YM / DIA levels.

Also, CLJ6 dropped under its weekly pivot (WP) today, so despite the bounce it never reclaimed its FebP and now back under WP. Staying under the WP means path of least resistance is DOWN.

My take - back to bear (opposed to bounce) playbook but watch the levels listed to confirm. I think out with some small gains on the emerging market trades, and ready to lock in INDU / DIA if any lower tomorrow. TLT should be full position with two chances to buy pullbacks. GLD judgment call if out a portion from Monday to add back at slightly higher levels. Then could increase shorts via QQQ, XLF and FXI. FXI actually did tag its FebP, but compared to all the other emerging indexes that did it is relatively weaker.  The USA shorts would especially confirm if leader DIA / YM / INDU looks like rejection of the FebP tomorrow. 

If we get a break from here, probably related to oil, I think markets could get very messy very quickly. DeMark is in the news for saying as much today, but I've already said as much here and here.



2/22/2016

Bullish for SPY, DIA and NYA/VTI to reclaim FebPs. Of the main indexes, QQQ and IWM remain below.

If ES stays above 1925 then bulls still have the ball. The next major resistance for SPY / ES is well above at the 1HP / YP combo, so although short term RSI is not ideal, this is a good r/r proposition to add. Just watch VIX QP 19.27 from here; below really helps confirm USA index strength.

If following The Pivotal Perspective, you were:
2/12 adding back longs on 2/12 on INDU/DIA after reducing and cutting USA QQQ and/or SPY longs 1/4-7;
2/16 further adding a combo of RSX, EWZ and EEM;
2/22 probably took some profits on a portion of GLD today, though GDX looks fine if playing on that;
Meanwhile, BTCUSD from 2/16 had a nice jump over the weekend, and TLT did not drop much despite the stock gain. Oh yes, oil lows have been nailed and turn alerts here and here good times to reduce any portfolio hedges or emerging market shorts as recommended from last November. 

All these ideas have been documented on the blog and then highlighted in the featured posts. As strategies go for 2016 so far, not too bad. :)


2/19/2016

SPY fell a bit under its FebP today, so that's bearish - under all pivots. But it doesn't really look like a rejection like 2/2, so we'll see what happens next week. 

Another bearish consideration is the INDU / DIA / YM were the USA leaders, and 2 of 3 of those fell back under the FebPs (DIA remains above). Again though, not really a clear rejection. 

My bias is for breakdown but right now I don't see a short term clear direction either way - we'll be watching these FebPs across the board and the WPs next week. 

2/18/2016

SPY back under all pivots, joining ES and SPX that stopped at the FebP yesterday. This is bearish. That said, it might have been a low volume pause. Current USA leader DIA is still above the FebP, along with YM, while INDU is fractionally below; too close to call. NYA also is below the FebP but small range bar suggests pause instead of smackdown.

Basically, we don't have the clearest signal to pile on re-shorts for USA stocks. Adding back the safe haven trades today, TLT or GLD if trimmed (site rec was to hold all GLD above 114), would have been the better move. Let's see what happens with FebPs tomorrow.  

2/17/2016

Despite my bias and high ISEE warning post yesterday, so far all is resolving in bullish fashion and I have to respect that. On this post I listed things to watch to help decide whether major low is in. Let's take a look at that list.

1. SPX cash YS1 at 1896, plus NYA YS1 at 9350. Both cleared.

2. Oil. CLH6 held the YS1 after recovering on 2/12. the new J contract the same. 

3. Short term levels. SPY, QQQ, DIA, IWM all opened above their weekly pivots and had no trouble at WR1s, which opened the door to WR2s. 

4. VIX closed below its FebP today, looking even like resistance. 

Additionally, the safe havens that exploded continue to fade. 

So what to do here? If respecting the strength of the bull, you could add on the INDU / DIA and hold above the FebP. There were also buy suggestions on RSX, EWZ and EEM over the weekend and yesterday which had nice pops today. 

From here watch SPY, ES and SPX FebPs at 192.21, ES 1925 and SPX 1930. SPY  closed fractionally above but ES had clear resistance on the level, and SPX is just under it. Above the FebPs across the board would be bullish and be a long add possibility; a clear rejection, however, would keep original bearish bias intact meaning caution on recent longs and ready to add back shorts. We'll see what happens tomorrow.

2/16/2016

SPY recovered YS1, ES also; but SPX close at 1895 bang on the YS1 level of 1896 and that is what needs to clear to really confirm. Still, 2 out of 3 is improvement from last week.

According to The Pivotal Perspective, the real question is whether we'll see a change of pivot status on the main USA indexes. So far despite a healthy bounce from the lows, all indexes remain below all long and medium term pivots. A move above FebPs will change this. 

The speculative INDU buy recommended Friday is doing fine, and now we'll watch the February pivots. Today I posted a couple of other buy ideas here on bitcoin  and another speculative buy here on EEM.

2/12/2016

Yesterday I sided with yearly levels (INDU YS1 break and VIX YP clear) but said " If Friday opens with INDU back above YS1 at 15746 and VIX below its YP/1HP combo at 27.46, then it shifts more bullish." 

So bullish version, and significant action on several yearly pivots today. I've been writing about the big yearly pivots in play this week here and here and here and here and here.

Today SPY followed through with the bounce from FebS1 and reclaimed YS1, barely; although ES and SPX still below their YS1s at 1866 and 1895 respectively. It looks like stage is set for more bounce, especially with timing model some low 2/11-15, but ES will have to clear 1866 to confirm. 



2/11/2016

From 2/10: "INDU is just above its YS1 / 1HS1 combo at 15746 & 15817 respectively, and RTY is just above its YS2 at 951. Watch these levels tomorrow, and then if lower we'll see the SPY & ES FebS1s." FebS1s (as noted in 2/8 post) were "SPY 182.52, ES 1808 and SPX 1822."

And that is where the market went, to the FebS1s. These held on ES near exact and looks like support, SPY broke and closed .34 above, eh; and SPX held despite breaking intraday. So all managed to close above which is potentially bullish and setting stage for rebound. 

But on the larger levels, INDU broke its YS1 so that's bearish; RTY held its YS2, possibly bullish; yet VIX closed above its YP today which surprisingly happened only by a fraction on 1/20. VIX says market in trouble; I side with yearly levels over monthly; so, whether market bounces or not from here is less likely. If Friday opens with INDU back above YS1 at 15746 and VIX below its YP/1HP combo at 27.46, then it shifts more bullish. 

2/10/2016

Bearish. SPY and ES tried to lift above the YS1s and these levels could have held as support, but didn't. Instead the market faded and the levels look like resistance. The more time the markets spend below YS1s the more chance we'll see YS2s - and those are a lot lower.

INDU is just above its YS1 / 1HS1 combo at 15746 & 15817 respectively, and RTY is just above its YS2 at 951. Watch these levels tomorrow, and then if lower we'll see the SPY & ES FebS1s.

2/9/2016

No real change to pivot status. SPY tried and failed to reclaim the YS1 / 1HS1 combo, which is bearish despite the intra-day buying. So staying below 186.45 means we should see the FebS1 at 182.52. Of course, reclaiming the YS1 / 1HS1 combo would be more bullish. On ES the levels are YS1 1866 then FebS1 1808. SPY & ES below. 

2/8/2016

SPY came within .28 of the FebS1 today, but the larger issue is a break of the YS1s on SPY and ES to join SPX that had broken on Friday. This is a big deal, because if YS1 breaks then there is more chance of seeing YS2. Historically, this is not as good a bet as the pivot to S1 / R1 move, but still, below yearly support is bearish.

SPY maybe rebounded a bit by nearing the FebS1 and/or August lows, but that's all I am seeing in this asset class on the lows using pivots. SPX low was within 6 points of the FebS1, and ES a bit more from the same level. IWM tagged FebS1 exact. Watch these FebS1 levels Tuesday: SPY 182.52, ES 1808 and SPX 1822.

Still, the bigger point: all major USA stock indexes / ETFs are below all pivots; major support meaning yearly and half-year levels that have held and bounced somewhat the last few weeks are breaking; and safe havens TLT and GLD are jumping. Until we see a major stock index above at least a quarterly pivot, and safe havens below, the trend is down.

SPY, ES and IWM below.


2/5/2016

Yikes! Thursday's rejection of FebP on SPY hitting pretty hard today. SPY will probably test YS1 / 1HS1 combo, and ES somehow keeps trying to rebound from YS1 1866 area. That has been the low area within just a few points on 1/27, 1/28, 2/3 and 2/5. If that goes it will go big. And NQ YS1 4130? Busted!

2/4/2016

From 2/3: "But still SPY and ES are below all long and medium term pivots, so it will have to rally back above the FebP to confirm the strength of today." And that is about where the rally stopped, poking above the FebP on SPY but falling back under with the level acting as clear resistance. The ES didn't even make it to its FebP at 1925.

What continue to show major strength are the save havens TLT and even GLD getting in gear. See the blog for posts on gold, the most recent being today. But in stock index / ETF area, DIA managed to close above its FebP for the second time this month (meaning obvious choice for any stock longs playing the bounce). Let's see if others can join in or if DIA fades back below. SPY, ES and DIA charts below.

 

2/3/2016

From 2/2: "As long as they stay below the FebPs, the most likely move is another test of the next support at the YS1s, 186.25 and 1866 on SPY and ES respectively."

And the low of the day was... 1865! That was a major league hold of the YS1; crystal clear on the ES. But still SPY and ES are below all long and medium term pivots, so it will have to rally back above the FebP to confirm the strength of today. 

2/2/2016

Well, the slightly improved change of status didn't last long. SPY and all the other stock indexes / ETFs back under all pivots today. As long as they stay below the FebPs, the most likely move is another test of the next support at the YS1s, 186.25 and 1866 on SPY and ES respectively.

2/1/2016

SPY had the first change of pivot status since 1/6/2016. By this I mean from 1/6 to 1/29, SPY was below all long and medium term pivots, meaning yearly, first half, first quarter and January. I am not counting the short term weekly or daily pivots in this designation. Today, SPY is above the February pivot. This is a sign of strength and as long as this level 192.21 holds then the bounce may go further. It also might pay to watch the ES FebP at 1926. Both SPY and ES charts below.

In addition, QQQ, DIA and NYA are above February pivots as well. QQQ even reclaimed its YP which is potentially a big deal, but watch the NDX YP to confirm as there is some discrepancy in pivot structure this year due to the 8/24/2015 spike low.