These can't hold the market for long, they will work intraday, but just as the SPX hasn't been able to make that new high since 8 days ago when it was 2 points, a fraction of a percent away, these levers won't be able to hold the market beyond intraday movements, things are getting ugly fast.
Here's what I first saw...
First I saw the VERY Liquid (thus they can use this lever and get in or out because of the liquidity) moving up as the SPX was moving down. This is lever #1 and figures in to the Capital Context SPY Arbitrage model.
I saw that the High income opportunity fund was not moving up, but down, sellers are in control of the market, the invisible hand is using HYG to try to stop the fall, but they'd never use HIO, it's not liquid, it's a bit obscure, this is better to take the temperature of sentiment at the time.
Copper also wasn't showing anything other than risk off as well.
HY credit was moving with the market to the downside, but here's the trick, HY credit is illiquid, if they use this as a lever they may get stuck when they need to get out quickly unlike High Yield Corp. Credit.
CONTEXT for ES was still pretty nasty and this is delayed 30 minutes, but the differential seen at the bottom as a histogram was rising, this told me some levers were being pulled and after seeing HYG, I figured that was the case.
The SPY arbitrage which uses rates and HYG in the calculations shows the model positive above the SPY with a +$.30 differential, now I know other levers are being pulled, VIX is another in this model.
I see the Dollar is not rising, yet the market is falling, they lost control here, the first positive divergence was overwhelmed with sellers.
The carry traders even seem to be running for the hills, although they are typically the first to run as they can have 200:1 leverage, but they were running last night as the FX markets opened so no surprise to see the Yen higher-Watch for jawboning from Japanese PM Abe or any of the BOJ Central bank governors to try to stem this closing of the carry trade which is pushing the Yen higher which is exactly what Abe and the BOJ DO NOT want. Again risk off, they're losing control and reaching for levers.
Yields have been in line with the market most of the day, but remember they are like a magnet for equities so stocks have some catching down to do .
Commodities, like Copper, are risk off and more so than the $USD strength would suggest. The bottom line, the market does not like this Cyprus deal, the ramifications are being thought of and they are not liking what they are coming up with.
When I saw EUR/USD's 1 min positive divergence I knew FX traders knew something that wasn't reflected in stocks yet, I'm still not sure if it's news or just the levers because I haven't had time to look, but they knew something.
Then VIX futures went negative here intraday and...
This is the SPY (green) vs VXX (Vix Futures in red), VIX futures should have been at a higher high, between VIX, HYG, EUR/USD and everything else above, the SPY Arb model made sense, that's why I had to get the trade idea out ASAP, I can't explain all of this fast enough.
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