4/26/2016

SPY looks fine per the close, and futures only down 5 points, but NDX / NQ / QQQ is another story. As I type NQ is back under its YP and that is a bearish status change.

If you saw the weakness in stocks and decided to add TLT that was a mistake - as I pointed out on 4/21, TLT traded below its QP for the first time since 1/5/16, so that was also a bearish status change. 

I recommended a hedging trade on 4/19 but most of these vehicles delivered gains for 1-3 days depending on how you count. 

Interestingly, if you were selecting index puts on SPY, DIA, QQQ or IWM, the best choice was the one index that did not reach its AprR1 - QQQ. 

Quite ironically, or not if you view this year as "the loser's revenge and the winner's sorrow", XLE is on the verge of reclaiming its YP for the first time since November 2014! See? What ran up in previous years - IBB, NDX/QQQ, NKY and DAX for that matter too - is lagging this year. Oil and oil related EWZ, RSZ, and XLE are leading, along with EEM, and of the USA indexes, IWM has put in the most impressive percentage rally off the lows.

SPY & QQQ below - QQQ will open significantly lower. Also note inability to turn green on the year adding to selling pressure. The red line marking the 2015 close is also about the same as AprR1. 

4/22/2016

So far not too much damage from the SPY ArpR1. We'll just have to see what happens next.

Safe havens are trading poorly; cannot be too bearish on stocks yet. Check back on the weekend on the blog for USA main indexes, safe havens, and valuation posts. 

4/21/2016

Pullback from AprR1 as expected in yesterday's post: "stage set for some drop here." How far this goes I do not know. Monthly levels typically are not a huge top. But the level was ideal place to hedge out some longs as suggested at the end of the 4/19 daily comment. 

Other interesting developments: CL1 contract, which has been giving the best signals, 1 day rejection of YP and 1HP, ie, a bearish development. Meanwhile, TLT trades under its QP for the first time since 1/5/2016.

4/20/2016

SPY poked above, then closed bang on AprR1 210.10; SPX high 2111 and AprR1 about 2109, close 2102; ES high 2105 with AprPR1 2106. Yup, right in the resistance zone. Two small blue bars with RSIs up there at top of daily chart Bollinger bands; stage set for some drop here.

That said in time I do think the market will want to visit larger pivot levels ie Q2R1, 1HR1 and YR1 which would mean new highs for SPY.

4/19/2016

SPY tagged its AprR1 of 210.10 today, the level I have been pointing to as a minimum before a top of more significance. ES and SPX levels are a bit higher, so it is also possible for SPY to clear and still have some rejection on AprR1 from those vehicles. 

Might this be a trading high? Now the chances have increased, especially with the near tag of DIA on AprR1, and IWM on AprR1 too. VIX and VIX related indexes aren't on any levels, but VI futures current K contract near tag of YS2 AprS1 combo and XIV AprR1 rejection both increase the chance too (my logic being the ideal turn has both stock index / ETF / futs AND VIX or VIX related vehicles on pivots). 

But the ultimate more important top should come on larger levels than just monthly. Of course anything can happen, and maybe the market continues to power up tomorrow, but right now the ideal move is pullback from the AprR1s before another move higher to Q2R1 / 1HR1 / YR1 major resistance area 214-217 on SPY.

It also doesn't hurt that we are just +1 trading day from the last timing window 4/15-18. Feel free to ignore this, but the last time we were 1 day from a pre-established timing window of 4/8-9 and on pivots was 4/7, and that was the key low of the month so far. 

I am not really doing detailed recommendations for strategy, and interestingly GLD/GDX is doing quite well along with the stock strength and TLT is holding up fine, but if following bullish scenarios of the past 2 weeks then you would be emphasizing longs. A general hedge here using your vehicle of choice (vehicle weaker under pivots for short, VI futs, XIV / UVXY, index puts, inverse ETFs to hedge out longs based on the AprR1) is very decent risk-reward idea. 

4/18/2016

Markets are really quite bullish here. SPY heading towards pivot resistance as I have maintained should be the case all April as long as the monthly pivots held as support. Basically we should see SPY AprR1 and other indexes on pivot resistance - monthly levels at least, and usually the larger quarterly, half-year or yearly levels for a top of importance. 

NYA especially today launched again from its YP, basically confirming the strength of last week. SPY and NYA below.

4/15/2016

Despite valuation (see this post) and seasonal ("sell in May") concerns, it is my contention that markets will see pivot resistance - which means at least monthly resistance, and much more typically quarterly, half-year, or yearly resistance - before we see a major top. 

From that view, SPY is doing fine above all pivots. April has traded entirely above the SPY monthly pivot without even a tag, likely on the way to AprR1 or higher. 

4/14/2016

OK sure, small change doji-like bar may get the top callers going. But like I wrote yesterday, and for that matter regarding the 4/1 area high, we should see multiple indexes at pivot resistance for a significant top. That isn't the case here, as all 5 main USA indexes and their variations are not near even monthly resistance.

The only reason to change back bearish would be a drop back under the NYA YP. Until that happens, USA indexes look great. The last 2 trading days are the only days since very early 2016 with 4 of 5 USA main indexes above their YPs. INDU and SPX led by convincingly clearing 3/11 and 3/16 respectively; NDX followed on 3/16 as well, but it took COMPQ to 3/30; and NYA until 4/13. 

4/13/2016

SPY continues to power up, holding positive for the year and now a move to AprR1 looks quite doable. 

The last few day have been very bullish for the market. NQ held its YP exact, as COMPQ broke slightly and recovered. These two tech indexes were labeled as "strong but testing" in the USA main index post, and holding those YPs was the bullish scenario for the week. Also, IWM and NYA both held their AprPs and launched, and these were the other levels I said to watch. Today, NYA moved above its YP for the first time this year, and big buying in IWM looks like it wants to go positive on the year too. 

Back to the SPY chart - if you examine in detail, after recovering the FebP on 2/17 the number of days with a bearish conclusion are quite few. Selling late February did not really break the level again, and after some shuffle powered up to the YP. There was a 1 day drop, then 2 days of pause, the a jump above levels. Another pullback held Q1P as support. The recent drop didn't even make it to AprP on SPY. So from 2/17 this has been an amazing trend considering how the year started. At some point this may end, but the ideal place for that is on pivot resistance - this means it can go higher. The green line above is the 2015 high, and that is where the bigger Q2R1 level is too. Can it get there? Maybe! It would be much more typical for a rally to stop on pivot resistance than not. 

4/12/2016

Despite my concerns of yesterday, SPY continues to hold above all pivots and positive for the year. I don't know if we'll see major resistance in April (up near 210) but oil rallying and NYA looking strong definitely gives this a chance.

If you took the last rec on XLE in size as one should on a good risk-reward setup, then you recouped the chop from last week. Glad what is likely to be my last real-time recommendation did so well! That said judgment to avoid EWZ & RSX at the time not looking correct; EWZ back above all pivots on 4/8 and RSX on 4/11. 

4/11/2016

SPY remains above all pivots, but VIX moved above its AprP today which in my view increases the risk of further declines in USA indexes.

Also, SPY has managed to stay positive on the year since achieving this status for the second time on 3/29. A return to negative territory may increase selling pressure. 

4/8/2016

SPY is doing fine, holding positive for 2016 and above all pivots. This week had some shakeout as expected but not too much damage.

But if you trading other vehicles, a wild ride! It has been a while since I have seen so much chop. Excitement of oil, XLE and GDX recommended longs offset by losses in EWJ, PIN and EWG shorts today. 

Due to developments that I have already noted on the blog, The Pivotal Perspective is scaling down. I have shown what I can do here for several months - and even this has been a very part time endeavor. But my time and energy soon moving on to an exciting new project. 

I hope to keep the SPY daily section going, but it will be just that - SPY only and not these extensive strategy posts involving all other asset classes like I have been writing about recently. Good luck and stay on the right side of the market!

4/7/2016

Ugh, sorry folks. If you have been following along this year, you can count the number of days that have been really unpleasant on one hand. However, today was one of those days. Every adjustment yesterday was proven wrong. But let's back up to those other times.

1/4-5 positioned long USA stocks expecting open above all pivots in 2016 on all main indexes to get massive slam on gap. Didn't take 12/31/2015 seriously enough on IWM for hedge. 
Result - cut USA stock longs 1/4-7, shorted SPY under YP, shifted into TLT both 1/6. Short term unpleasantness, longer term success. 

Late February after already having started longs 2/12-16 on DIA, oil and emerging markets EEM, RSX, EWZ, played bounce with DIA and SPY above FebP; the next day looked close to rejection so went back to mostly bearish; shuffled again to bullish the next day. Frustrating but shifting was correct. Again short term frustration, longer term success.  

This week: Added some defensive trades 4/1, TLT long above all pivots and EWJ short below all pivots, then this week small EWG short. I suggested XLF as additional short for the bears. 4/5 said cut EEM long 4/5 and oil runners, then 4/6 back in long again. On 4/6 XLF looked like hold of AprP so said cut short, also cut EWG short based on jump from AprP. Everything looked bullish, volume healthy enough and no reason to nix, and a variety of VIX vehicles confirmed rally.

Today, the bullish adjustments have been proven wrong. Have to say today one of the most frustrating days of the year but reminding myself of the other times this has happened and making decisions based on pivots. "Go with the flow and think about r/r."

First things to cut - whatever setup is no longer valid. So, EEM long has to go. I don't know about you but reverse short tough thing to do on a down portfolio day with index -2% and now almost between AprP resistance and Q2P possible support. So just cut the long. I still want to hold DIA market leader and SOXX positions long, as long as SOXX holds AprP. But if that breaks, will just take the gains on SOXX. Oil and XLE are holding by a thread, so hold we must. EWG / EWJ extremely frustrating today, as USDJPY blamed for the drop and EWJ somehow is -.5% and EWG cut yesterday is down -2.2%. I guess combo of DAX and EWG would have been better idea, because that would have stayed in the short trade. Then GLD/GDX, reduced last week based on rejection from YR1 level today jumping above. ARGH!

GLD is just on its AprP but not above, so tougher to re-enter long on that, at least today. GDX maybe as above its YR1 and its AprP and no other resistance in the way. EWG very tough to re-short but below all pivots. Usual daily chart really not ideal set-up, keep 1 unit small for now. 

Again sharing larger thought process for the time being even though this page is 'SPY daily." At some point it may revert to that, ie comments on SPY only and strategy is up to you or other clients. 

Out of 20 units, each unit representing 5% of portfolio, ability to go to 25 or 125% on margin:
8 DIA longs 2/12 to 3/11 entries, still very healthy gains
2 SOXX entry 3/1, some gains
2 TLT entry 4/1 some gains
2 GLD/GDX late January entry great gains
2 EWJ short entry 4/1 short small gains
2 Oil / XLE long entry 4/6 hanging on

1 EEM long entry 4/6 cut today for loss
1 GDX long today added back = 19 units
1 EWG short today added back = 20 units
2 PIN short new position today below all pivots, valid below Q2P, daily MA & BB chart less concern than EWG = 22 units
Current total = 12 longs, 10 shorts / safe havens, 110% portfolio exposure

If oil/XLE any lower that will be cut.
If XLF any lower it will break Q2P and be below all pivots probably best USA short, although already below daily BB not ideal setup. 
If IWM breaks AprP and VIX remains above AprP then looks good for hedging USA position.

TLT remains the strongest trend in the market and already jumping above AprR1 and looks on its way to test the high. Apr1 was easy to buy, much tougher up here outside the upper daily BB and hourly chart overbought (OB).

VIX vehicles (VIX VXN VXD VRX VXEEM) jumped above AprPs today which is bearish, even though SPY QQQ DIA IWM and even NYA all holding their AprPs. ACWI broke though, so that means more bearish for global markets ex-USA. Together the AprPs across the board (USA mains and VIX vehicles) are the levels to watch from here. If you want to shift more defensive, then take gains on some longs and rotate more into safe havens or shorts. 
 

4/6/2016

Wow! This market is still really quite strong! Despite RSI reaching near fully overbought (70+) on SPY at 69.25 on 4/1; ES fully overbought 3/18-22 and again 3/30 and 4/1 at 71.86; and SPX like SPY fully overbought on 4/1 at 70.36, just a 2 day minor drop to send RSIs down to high 50s then race back to highs! Any bearish adjustments the last 2 days got crushed.

Also note, NYA held near AprP test and jumped so that is a quite bullish response to the 1HP selling we saw the last 2 days. NYA also below. 

Oil, ugh, right idea wrong vehicle. Original idea was to hold runner portions above Q2Ps. Exactly right idea - on CL1 continuous contract, which I was not emphasizing compared to the current K contract which broke down. 

OK so what from here? Look, one of the key benefits of pivots is you know *exactly* where you are wrong and so just cut the position. I have had several wrong ideas this year, but most of them have been gone for minimal % and usually out the next day. Whereas, the DIA positions I recommended on 2/12, have not yet said sell. :) I did shuffle the adds late February, but once bounce scenario back on, I have not said sell those either. SOXX cleared 1HP 3/1, again, no message to sell. Original gold positions, have not said sell (just the adds). Only TLT did I make this mistake with shakeout below 1HR1 on 3/11. 

So with that in mind, again sharing thought process here:
EWG short from yesterday, simple, cut! ie, reason for trade below Q2P, today back above, OUT.
EWJ short from 4/1, OK to hold with a tight leash. Decent up bar from YS1 today but still under purchase price. 
QQQ if you took that as last bullish add last week it was better to hold it - above all pivots and not into any resistance yet. But if you cut, that was mistake. Always OK to get back in if reason for cutting position no longer valid!
XLF mentioned possible short for the bears, easy cut with hold of AprP today.
Oil cut runner unit(s) and reversed small short, sigh... i was wondering about a fake-out shake-out per yesterday and that is what happened. CL1 best signals, note to file! Reverse back to small long but still under AprP as well as YP and HP so not big size here.
TLT back to scratch OK to hold above all pivots but looking vulnerable; also rejection from AprR1. 
EEM thought cut yesterday with negative action on 1HP, AprP and D200MA; if you want some emerging market exposure, have to get back in. It is very hard to get back in something at higher price that you just sold, but, like I mentioned yesterday, best to admit mistakes, go with the flow, and think about risk-reward. Risk is another drop under AprP and can cut again. Reward is move above long term pivots for easy long term hold. We'll see! If you get chopped a few times on the same position then give it a rest but that hasn't happened here quite yet. 
Lastly XLE idea from this morning very good r/r setup here. Idea valid above the AprP. This will likely move along with oil. 

 

 

4/5/2016

Looks like SPY want to test its 2015 close level and then possibly AprP. As I thought was likely in the USA main index chart roundup, "A strong market can ignore overbought readings as the Dow has already done so far, but as more indexes join in overbought territory the more likely move is a slowdown to a range with a quick shakeout to work off the overbought condition."

And after a 2 day drop SPY RSI has gone from 69.25 at the high to 57, which is already near uptrend buy zone and possibly pivot support. 

That said, I am not completely without concern here. NYA and ACWI showing more rejection from long term levels, and safe havens remain quite strong especially considering the stock rally. I am also wondering how NKY and DAX can both be so weak - below all pivots! - and USA maintain strength enough to test 2015 highs.  

Thankfully the most recent moves are cushioning the blow: NKY / EWJ shorts triggered last week and even without a perfect entry did quite well today. Given recent trend analysis of TLT, adding a couple units back in TLT when above all pivots on 4/1 was an easy choice.

But the idea to hold oil related runner units above Q2P was a mistake, as that broke down without any attempt at bounce. Given daily chart look I think it was a small reverse short, ie 1 unit. This could be wrong, but this is not an ideal setup for big oil short (ie 5 units out of 20 or 25 with margin in my way of thinking). I am wondering about a fake-out shake-out here so that is something to watch and if back above the Q2P it is a cut and reverse back to small long. Hey, if you want to actively manage sometimes you have to be flexible. 

I don't like the look of EEM here as it had bearish action on both long term level (1HP), medium term level (AprP) and a moving average (D200MA). So if you are in (first suggested mid Feb) I think time to cut it instead of trying to hedge via FXI and we'll just keep the capital free for next idea. 

VIX is still under all pivots, but a few VIX vehicles jumped above monthly pivots today while their indexes were above. These are something to watch going forward. Lastly, per yesterday's idea, if you wanted to make portfolio slightly less bullish, easy choice is sell any latest tech longs from last week for scratch and add an XLF short, or enter on DAX/EWG as EWG closed under its Q2P placing it under all pivots. I have been talking about NKY and DAX weakness for weeks now and just waiting for triggers. 

After shuffling the adds on GLD twice, seeing rejections from YR1 just to immediately come back, I am hoping that doesn't start flying again after reducing the position. But if it does it does and given strength this year candidate for back in more long, and hopefully 3rd time above YR1 - if that happens - will be solid support.

This is quite a bit more than SPY daily today but just sharing my thought process. This is what a student of the market does that is not obsessed about back-testing everything which seems quite common these days. Go with the flow and the best trends and think about risk-reward. Personally I don't think everything can be back-tested. Each market condition is different. Study the pattern of movements and how to profit from them. These patterns are what will be similar and what I have shown here for several months now on this site. I am not saying perfect and when something is wrong I mention it immediately. In fact ability to admit mistakes is key to staying in this game. Cutting TLT was a mistake; holding runner units in oil was a mistake; reducing GLD/GDX might have been a mistake. We shall see. But if someone could succeed with mathematically back-tested models why are so many hedge funds and mutual funds suffering atrocious performance? Success in this game takes synthesis style thinking which sadly seems quite out of favor.

C'mon, this site has recommended quite clearly to cut, hedge or short USA stocks the first week of January; buy bonds (TLT) and then add, then take some profits at the high; buy gold and then add; started buying back USA stocks via DIA and oil 2/12 and then emerging markets soon after; went further long the leaders late February; added on SOXX early March, then DIA add after that; had a 1 day VIX futs hedging trade that was about perfect, then most recently shorted Japan EWJ after mentioning this idea for weeks - all documented in real time on this SPY section and main blog since there is no re-wind on tradingview chart data feed, and the most common question is, can this be back-tested? Ha! 

4/4/2016

SPY still doing fine, but so far the market a bit more bearish this week with selling from NYA 1HP and oil broke under its Q2P. 

With oil back under all pivots, I think best to cut any remainder runner portions on oil, or RSX/EWZ if still in, as they also had major pivot rejections today. And why not short oil again, back under all pivots? 

Otherwise the suggested portfolio is still quite long with DIA, SOXX, perhaps small EEM that looks more sketchy today, and QQQ looked like a good further add last week with NDX jumping from its YP, and lastly some partial holds in GLD/GDX. Recent short on NKY / EWJ, and small TLT long was rather weak. Still I'm more tempted to see what happens tomorrow rather than making further adjustments other than the oil moves today. This is just because I prefer to make entries near pivots and a lot of indexes aren't tagging anything. 

If more benchmark indexes open below weekly pivots on Tuesday, or you are more bearish, then I suppose XLF is still running into its YP / HP combo and could be partial hedge for other USA positions. 

4/1/2016

Oops, a day late with 4/1 post as I got wrapped up in a lot of other ideas on the blog over the weekend. 4/1 was quite fine for SPY again holding green for the year. Well above AprP support but also far away from any resistance other than weekly levels. 

3/31/2016

SPY faded a bit from MarR2 today, as the ES chart suggested yesterday with a close just under th level. The change-overs are one of the frustrations of the method. Does this count as rejection when the level will vanish tomorrow and be replaced by very bullish looking April pivots? In other words, with the March rally SPY will open above all pivots which usually means hold longs, not short. I side with holding longs, especially on USA leaders. 

3/30/2016

Strong rally continues. SPY reached MarR2 206.03. There is only 1 more trading day that this is in play of course, but for now it didn't really act as resistance which I  interpret as bullish. ES is showing a bit more look of resistance, but at this level market will open well above Q2 and April pivots.