A few weeks ago I passed along a chart of the $VXV:$VIX ratio that illustrated that market bounces often took place when this ratio fell below a value of 1.00. On an intra-day basis today, this ratio did temporarily come very close to touching the 1.00 level.

Yesterday the NDX closed with an RSI-2 value of 97.16. Today, that value has fallen down to 15.70 at the moment. This kind of one day, 80+ point drop in the RSI-2 often leads to a reversal on a historical basis. Of course, the current outside news about the Trump-Comey memo could override and/or interfere with the "normal" technical response to this kind of pattern. 

This is the longest period of calm for the S&P 500 since 1969...

http://www.institutionalinvestorsalpha.com/Article/3716778/The-2017-Rich-List-of-the-Worlds-Top-Earning-Hedge-Fund-Managers.html

The last time the US equity market had a longer stretch of calmness was February 1969. As UBS' veteran market operator Art Cashin exclaimed Friday, it  "was another waste of carfare and a clean shirt."  This is the longest stretch of market moves less than 0.5% since 1995.

Cashin added that the S&P first touched 2400 back on March 1st and it has  not moved significantly away from that anchor in the two and a half months since then.  Cashin's advice:  Consensus says bulls need to regroup and punch out of this consolidation phase -  the challenge is to take the S&P clearly above 2400 . Stick with the drill – stay wary, alert and very, very nimble.

As described below, the top 5 S&P stocks dominated the index over the past 10 weeks

http://wolfstreet.com/2017/05/09/faang-stocks-gain-rest-of-sp500-lose/

According to the latest breakdown from Goldman, as of May 10, just 10 companies are responsible for half, or 46% to be exact, of the entire S&P's rally YTD.

Interesting to calculate that trading XIV-VXX instead of SPY-SH on this year's Spy Pro signals would, as of last night's close, have produced a gain of +30.76% YTD. This assumes trading prices occurred at the stated closing prices each time a trade was executed. At the moment XIV is up +0.55% on the day, but is substantially off of its' intra-day high.

Given its volatility, using XIV-VXX is not for the faint of heart.

http://www.zerohedge.com/news/2017-05-09/three-fast-facts-about-slow-markets

On Tuesday, the SEC ignored numerous complaints, and approved a request to trade  quadruple-leveraged exchange-traded funds, the first product of its kind, and one which will spawn hundreds of copycat imitators promising even greater possible returns and instead delivering theta that is guaranteed to wipe out virtually anyone who allocates capital to the product.

The request to list ForceShares Daily 4X US Market Futures Long Fund, under the ticker  UP , and ForceShares Daily 4X US Market Futures Short Fund, under the far more appropriate ticker  DOWN , was filed by the NYSE Arca exchange.  One of the funds is designed to deliver 400 percent of the daily performance of S&P 500 stock index futures, while another fund will aim to deliver four times the inverse of that benchmark. That means that - in theory - a fund could go up 8 percent on a day the index it tracks falls by 2 percent. However, due to the rebalancing nature of such products, it most likely won't, and instead will be used as another massively shorted vehicle by all those pension funds who scramble to capture the volatility roll "dividend" from markets that no longer see any risk, anywhere.

http://www.zerohedge.com/news/2017-05-02/vix-below-10-means

Yesterday Sentimentrader.com reported that outflows from Gold Miners ETF’s GDX and GDXJ topped $800 million on 4/26, the largest single day outflows in history. 

From Zero Hedge: Well that was fast:  literally seconds ago we posted JPM's Q1 GDP forecast revision , saying "while we wait to see if the Atlanta Fed will cut its final Q1 GDP estimate ahead of tomorrow's official print to 0% or negative." At precisely the same time as we hit the publish button, the Atlanta Fed came out with its revised forecast and it's a doozy: after starting its Q1 GDP nowcast at 2.5%, rising as high as 3.4%, and plunging recently as low as 0.5%, the Atlanta Fed has "thrown in the towel" on the quarter in which the Fed hiked rates, and while not negative - or 0.0% - it was about as close as it could go without the Fed losing all credibility for having hiked in a contraction quarter

"The current level of the CAPE ratio 'would suggest reducing your holdings of stocks, especially for a long-term investor. We can't time the market accurately, but we know that when it's this high, over the long term, it usually doesn't do great.'"

-Robert Shiller quoted in CNBC, February 24, 2017

The market value of the tech dominated top five companies is now some $2.75 trillion dollars

“ I made my money by selling too soon” – Bernard Baruch

There is no doubt that the market can grind higher to more dizzying valuations. However, there is also strong historical evidence that this market will eventually normalize to average valuations.  In the wisdom of Bernard Baruch, there are times when you “make your money” by not losing it. Perhaps more importantly, you preserve the ability to buy when better opportunities present themselves.

I was looking at Matt's Sell in May and Go Away information, along with the paint dry system trade dates.

It struck me that combining the "Paint Dry" system into the mix would have meant that no trade would have taken place in Oct 2008 for the Sell in May system  - because "Paint Dry" was in CASH in Oct of 2008. Instead of buying at 9065.12 in Oct 2008, that buy would have been postponed until 3-31-09 when Paint Dry went long again.

Sell in May then went to cash on 4-21 09 for a 4.75% gain instead of a -12.08% loss. Hypothetical compounding of that positive result, instead of the 12% loss, puts the compounded total for Sell in May at something like $2,556,888 instead of Matt's hypothetical $2,144,644 that is listed in the data.

Another example of how important it is to eliminate or lessen losses by going to 100% cash at times - something the Wall Street types think is impossible to do successfully.