5/24/2016

From 5/19 Daily SPY comment: "Maybe this is a key trading low, and given action on ES that is already off to a good start. The crowd is beared up, markets have been down about a month, and we've had a mild and mostly sideways pullback. For now the MayS1 holds and SPY remains above the other pivots. NDX holding its Q2P and NYA recovering its 1HP would be key tells for the market from here, as well as VIX moving back down."

Today was a big score for the bulls. In addition to SPY reclaiming status above all pivots, the Tech set, which has been a recent weak link, had significant bullish action. NDX jumped above the YP, 1HP and MayP, so also regaining status of above all pivots. This is a very big deal, especially considering just 4 trading days ago it held Q2P and barely avoided the status of below all pivots. NYA jumped back above its YP and closed slightly above its MayP as well.

Meanwhile, 2 of 4 key safe havens, GLD and VIX, supported the move in stocks. GLD looks quite vulnerable with a drop below YR1, continuing recent weakness below its MayP. VIX back under all pivots as well, so usually this means move is for real.

Remember, the crowd was quite bearish on the recent pullback low, and I pointed this out in the most recent Total market view. 

SPY above all pivots should mean we see an R1; the lowest of which is May R1 above 210. But this is in play just a few more trading days, and then we'll have June pivots and the much more important Q1R1 near 214.

Simply stated, after sounding an alarm for a trading high and hedge rec on 4/19-20, then pointing out chance for key low last week with the hold of MayS1s, I'm back to bull mode the more I see risk indexes above all pivots and safe havens cracking. Fiddle with fundamentals all you want, I don't see how you could do better than a portfolio hedge on 4/19-20, half off 5/19 and back to fully long 5/24. 

5/23/2016

No change to SPX set (SPX SPY ES) pivot status; ie, above yearly, half-year, and quarterly, yet below monthly. 

But there was mildly negative action on NDX YP and NYA 1HP, and so far VIX and TLT favor the bears. SPY, NDX and NYA below. 

5/20/2016

Decent bounce off the MayS1s.

Very simply April high on monthly R1 to May low on monthly S1. I don't know how you could capture this movement so simply and precisely with any fundamental metric. 

5/19/2016

Nearly all of May I have been looking for a move to MayS1s. There were just two trading days with SPY above the MayP and I put my bearishness on pause, but still had several other concerns as outlined here on 5/1. 

In the most recent Total market view post, I said a move to MayS1s was very likely and then we would see what happens from there. 

And that's exactly how it has played out, with the SPX set tagging the MayS1s today, and rallying from there. In fact, SPY, DIA, IWM and NYA have all tagged the MayS1s (or come close enough), and VIX tagged MayR1 too.

Maybe this is a key trading low, and given action on ES that is already off to a good start. The crowd is beared up, markets have been down about a month, and we've had a mild and mostly sideways pullback. For now the MayS1 holds and SPY remains above the other pivots. NDX holding its Q2P and NYA recovering its 1HP would be key tells for the market from here, as well as VIX moving back down. 

SPY, ES and SPX charts all below showing the move bang on the MayS1s. Remember, those small green dots that make up the MayS1 have been fixed from the close of the last trading day of April and remains in play to the end of the month. 

5/18/2016

SPY set (SPX / SPY / ES) remained under MayPs today, still inviting a move down to MayS1s as DIA and IWM have already tagged or come close enough. 

The big move was in bonds, with TLT back down to test its Q2P. If that goes it will be the 3rd break; 2nd breaks are often definitive, so a 3rd if that happens should be a lock. SPY and TLT below.

5/17/2016

MayP holds as resistance and clear rejection! Throughout May I have been expecting a move to the MayS1s.

4/30: "Now anything can happen, and perhaps things change back to bullish next week, but right now the stock indexes are shaky. Any index trading below its MayP will be subject to further declines and likely test the MayS1."

5/1: "So considering... AND... AND... AND... AND... It is possible that we just saw a major top."

There are others, but that will suffice. Anyway, today VIX closed above the MayP as well; though it doesn't quite have the "look of support" this is the 2nd time SPY has rejected the MayP as VIX has moved above. This "should be" a decent sell signal with the move down to MayS1s at minimum. 

The tech set (NDX, COMPQ, NQ futs) are testing Q2Ps as I pointed out in the USA main indexes post over the weekend. This will be a big tell for the market. 

5/16/2016

With the second rejection of the MayP last week I thought for sure SPY would visit MayS1; still not impossible but now much closer to recovering status of above all pivots.

On the positive side, I did say that VIX would need to confirm for a decent sell signal, and it did not - in other words, VIX gets the market right again. 

5/13/2016

And there is the clear rejection of the MayP on decent volume. Stage is set for lower prices, although somehow VIX is not signaling trouble yet. 

5/12/2016

SPY closed under its MayP today, which is somewhat bearish considering the open was above. SPY doesn't quite have the "look of rejection" yet, but it looks to be setting up that way on the ES on the current bar (5/13 bar starts after hours on 5/12).

In my view VIX will have to lift above the MayP along with indexes clearly rejecting their MayPs tomorrow for a good sell signal considering the recent chop. 

5/11/2016

Whoops! For the second time this month, SPY broke its MayP without reaching any resistance level. The most frustrating thing about any technical method is the possibility for whipsaw, which is why I try to integrate other factors per my Total market view posts (if interested search on the FAQ page).

As of 4/20 I felt very confident in a trading high and recommended a hedging trade, but your management of that depends on what you used. VIX vehicles or puts had to exit quickly due to deterioration, but if you are a portfolio manager or savvy trader and hedging out via futures or inverse ETFs then basically you nailed the high and could still be in that hedged position. 

Anyway, as of 4/29 I thought there was an increased chance that we had seen a major top because RTY / IWM  reached long term pivots and was rejected, NDX broke its YP again, and the current contract in oil failed at its 1HP. This was together with several other concerns as outlined in this post. 

Interestingly, SPY (and DIA and NYA) have been above all pivots twice in May, only to fail twice. Usually second moves are definitive but here we have had two moves above the MayP and two breaks. This starts to fall into the chop category. 

Lastly, and I hope this isn't too annoying, but consider the timing factor. I had 5/9 as a key date. There has been a 5/6L and a 5/10H making this very inconclusive, as both of these are just 1 trading day off. My preference is that 5/9 +1 turned into a key high on 5/10 and next move is lower, but the market has been stronger than I have thought many times in the past. The MayPs will hopefully make a definitive move from here. Also, especially looks for the "look of rejection" with volume tomorrow. If so, next larger move should be down. If pivots recover, especially with VIX below all pivots, I will have to scratch my bearish bias. 

ps: USA main indexes don't usually make new all time highs when TLT and GLD are once again the only vehicles I track above all pivots. 

5/10/2016

Wow! SPY launches above its MayP, along with DIA, IWM and NYA all above MayPs; only QQQ below. 

Somehow, TLT and GLD are also above all pivots, and VIX remains convincingly below all pivots. 

Take your pick, investable assets are doing well here! (I'm not mentioning commodities or global indexes/ETFs, but those are up too.)

Back to SPY: should be going for MayR1 at least and possibly up to larger resistance at Q2R1 near 214, then the major 1HR1 / YR1 combo near 217.

5/9/2016

SPY (and variants SPX & ES) stayed under the MayP today, so the preferred move to MayS1 is still possible. Other main USA indexes stayed under MayPs as well. 

TLT remains above all pivots; strength in a safe haven usually means fear. Yet VIX is below all pivots, indicating confidence / complacency. Strange market. 

5/6/2016

SPY managed to hold positive for the year. It could have been worse on Friday given the report.

Also, VIX closed back under its MayP; VIX is often correct, so this is a bullish sign. If the market was going to have a sharper drop, VIX should have stayed above its monthly pivot. 

5/5/2016

Stock indexes were relatively flat but TLT moved up quite sharply above all pivots. To re-state from yesterday, this is a risk-off environment. 

5/4/2016

Another day down below the MayP, along with VIX for the 2nd day above its MayP. Next support for SPY at the MayS1; and another interesting level to watch on SPY is whether it can stay positive for the year at the red line on the chart below. 

NYA is not mentioned in the media as much as SPX/SPY, NDX/QQQ, INDU/DIA, and RTY/IWM, but I think it is a key institutional index. It moved back under its YP today, a bearish development. ACWI, an ETF based on a global institutional index, traded slightly under its YP yesterday and had downside follow through today. Big institutions not defending key support is a big problem for the market. 

VIX doesn't look too bad yet, but TLT back above all pivots, joining GLD with the same status. Theses are now the only vehicles I track that are above all pivots. This is a risk-off environment. 

5/3/2016

"Sell in May and go away." Cliche but this time several other concerns as listed in this recent blog post bore out today, with all 5 main USA indexes trading below their MayPs. Indexes are still close enough to recover, so any follow through on the downside would look quite bearish. 

NYA is again testing its YP so that is a very key area to watch.

There is more damage in the global indexes with ACWI moving below its YP, EEM 4/19 high on YP exact and today moving below 1HP, FXI and Shanghai weak, and oil related vehicles moving lower as well. 

5/2/2016

SPY rallied above its MayP which is bullish. VIX could have stayed above its MayP but didn't. Of the 5 USA main indexes, only the tech set NDX / QQQ / NQ is below the monthly pivot. 

Meanwhile, TLT 2nd recent move below its Q2P, also below its MayP. 2nd rejections are often definitive. 

Bottom line, despite concerns in the recent total market view post on the blog, USA main indexes are mostly quite fine here. I said the MayPs would be an important tell and so far that is bullish for stocks. 

If SPY can hold its monthly pivot then the next resistance levels are MayR1 near 210 which is essentially a  high test, then Q2R1 near 214 and 1HR1 / YR1 above that. 

4/29/2016

SPY trading top basically on the AprR1; new monthly pivots next week. It looks like SPY will be very near the new MayP so that will be important to watch on Monday. 

4/28/2016

SPY essentially second rejection from AprR1. Second rejections tend to be definitive, although this pivot resistance is only in play for one more day. 

More importantly, NDX broke the YP slightly, COMPQ definitely broke its YP, and NQ YP looks like resistance which is bearish. In fact, NQ below 3/4 pivots! Meanwhile, TLT recovered its Q2P. So, bearish status change for the tech set and bullish status change for TLT. Draw your own conclusions.

4/27/2016

SPY again nearing AprR1 , which is really quite bullish. Pullbacks after the 2/11 low have been minimal. 

Also, NDX / COMPQ / NQ all held their YPs today - so things could have been a lot worse, with price below after hours. 

If you've been holding DIA (buys 2/11-3/11 and never said sell), SOXX (buy from 3/2, and maintained hold criteria several times), added some on XLE (direct blog rec 4/6), then placed some hedging trade 4/19-20 and managed it well, you are doing extremely well despite having to adjust out of TLT longs and decide what to do with GLD/GDX and/or any re-entry on emerging market long positions.