CHANGES IN CHARACTER LEAD TO CHANGES IN TRENDS

I'll try to keep this short so you can enjoy your holiday weekend. Black Friday felt a lot darker in the market than usual, in fact most of the averages gave up a good portion of the gains on the week and on the day, not pretty...

 On the day, a pretty solid drift down, in fact to prevent people driving to the stores from hearing the Dow closed red today, there was a late day effort to secure the fractional gain, close to dead flat without the ramp it would have been red...Dow-30 in white JUST closes green.

There was NO positive divegrence in the Dow...

The white trendline is the difference between red and green , actually my charts are showing the Dow at 0.00% on the day, but it almost didn't get that.


And could this have been the work of credit? You saw the 3C charts deteriorating badly today...You've also seen the HYG support, accumulation turn distribution this week leading to today.

 HYG (blue) longer term vs SPX (green), the last negative divegrence between the two was at the September head fake highs leading to the October lows to the left, look  at the size of the divergence between the two now. You'd barely know HYG was ramped to support the market the last week looking at this chart, but it was.

 Here's the ramp in HYG on the 19th, it supporting the SPX and then today, it didn't just come out of nowhere. This is the detailed 3C distribution trend...

 After accumulation on the 19th, distribution just got worse and worse in HYG until today's break lower, perhaps stocks are already following credit's lead, but I sure wouldn't want to be long going in to Monday morning.

Here's a closer view of HYG vs SPX over the last week and a half, note the near perfect support...Well that ENDED today.

Not only in the HYG lever, but USD/JPY as well!

 Es (purple) overnight losing ground until the European open, then regaining in lockstep with USD/JPY, right in to the US cash open and then...

BREAK and hard! This is addition to a larger break between the two already in place and USD/JPY looking as if it too is ready to roll over.

As for other credit in the HY space... no better...

 Again on a larger timeframe the last time HY Credit and the SPX diverged was the September highs leading to the October lows (red arrow) and look at the size of this divergence!

As for near term, the past several weeks have seen HY credit pick up the pace of sell-off, I wonder why?

As for leading indicators, remember the VIX accumulation in VIX futures Wednesday on the 1 min chart, joining the longer term charts?

 VIX (blue) intraday vs ES, note VIX bid moving up WITH stocks early until stocks fall in the late morning?

 Here's where we had our VIX buy signal, note the uptrend in VIX until last week's levers needed to be pulled, and today VIX rockets back up on a half day!

In fact looking at our buy signal and Bollinger Band pinch, today almost looks like the start of that highly directional move the pinching bands are pointing to.

 Again yields lead stocks (red) vs SPX (green), this longer term chart shows a MASSIVE divergence after a very healthy set of treasury auctions this week.

And near term, what do we know about changes in character? Look at the change in the drop in 5 year yields remembering they lead price toward them!

 Even the longer term 30 year yield closed at an incredibly low 2.91% and has diverged massively with the SPX which tends to follow it even intraday.

And a closer look, talk about a change in character, SAFETY is BID.

This was an ugly market as you can see by TICK which has nothing to do with volume, it has to do with advancing and declining stocks...

Not only did it have a huge change in character and went negative on the day, but until the DOW's last minute save from red, it had not crossed above +500 for almost the entire day! That's a lot of stocks going no where but down.

After a record some 29 days, which last time it happened was followed by the Crash of 1929, the S&P CLOSED BELOW ITS 5-DAY MOVING AVERAGE FOR THE FIRST TIME OIN OVER A MONTH!

IT'S NOT MUCH, BUT IT IS A CLOSE BELOW THE 5-DAY MOVING AVERAGE, "CHANGES IN CHARACTER LEAD TO CHANGES IN TRENDS..."

Speaking of which, our SPX/RUT Ratio looked like this today...

Hmmm. it was warning of a move lower as of Wednesday and is far, far below the SPX's correlation above.

As for the might Transports, well they gave nearly EVERYTHING back today...

Transports on the gap up and sell off today, a couple more hours and?

Be aware of today's post, BEFORE THIS HAPPENED IN TRANSPORTS...

Be Careful with Airlines

Lots of recent trends have changed this week...

Today's

Important Intraday Update

First Two Alerts of the Day-Copper and Oil

Early Indications, HY Corp. Credit Smashed

Wednesday's

HYG Starting to Fail, VIX 2 Cents From Green

AAPL Update

Quick USO Update

Leading Indicators / SPY Arb...

Tuesday's

Russell 2000 Map- IMPORTANT POST

VERY BAD Market NEWS...Richmond F_E_D, CONTEXT, SPY Arbitrage and TLT-30 year Treasuries...

Quick Index Futures Update-VIX Futures are SCREAMING (now higher than when posted)

Monday's

HYG CONTINUED DISTRIBUTION

Lots of good reading above that may take on a different light after the charts above today.

As for the Dominant Price/Volume Relationship...

The Dow, NASDAQ and SPX all were Close Up/Volume Down (remember these are the component stocks of each average, not the average itself) for each, 15 Dow, 70 NDX100 and 266 SPX-500. This is the most bearish of the 4 possible relationships.

The Russell 2000 was Close Down/Volume Down or what I call, "Carry on" as the trend tends to continue for the index, this was dominant at 1048.

The S&P Sectors saw a slightly overbought 6 of 9 close green, not good paired with the Dominant P//V relationship. Consumer Staples led at +1.277% and Energy lagged at -6.42%, Glad we stayed away from oil as we saw it as a crap shoot, not trading.

Of the 238 Morningstar groups and sub-industries,  115 of 238 closed green, an odd divergence with the S&P sectors.

A Couple Breadth Indicators...

Other than the larger divegrence in the NASDAQ Composite's Advance/Decline line, there was an extra near term one at the small white trendline.

NASDAQ COMP in red and the A/D line in green.

AlL NYSE stocks trading Above their 200-day moving average vs the SPX (red)...

Not only is there a larger divergence (yellow arrows), but the range mentioned, now near 3 weeks is looking like it's about to rollover as mentioned Wednesday.

There are quite a few problems above, remember my prediction in early October before the rally, not that we'd just see a face ripping rally, but it would lead to an even larger decline as the rally was  JUST A MEANS TO AN END, NOT AN END IN ITSELF.

HAVE A GREAT WEEKEND!