Leading Indicator TLT Follow Up / Market Update

Apparently all of the intraday action, the move down and then back toward the range which would "seem" like an option expiration pin, may  not be that at all.

Greece apparently sent the WRONG letter to the Euro-group Emergency Finance Minister meeting, the one that Germany blew out of the water. Apparently the "new one" has made significant concessions, although I still can't see how they can agree to German demands. It has been called, "Going the extra 10 miles" by Greece. Apparently, they just couldn't get the CORRECT letter to the Emergency meeting, either a total BS story or gross incompetence, I'm sure the Fin-mins are all very pleased to wait for Greece to send the correct letter and I can only imagine the whispers and chuckles if indeed this is the case and not a Greek Bank run road-block.

Looking at Leading Indicators, which I normally don't like to do too early as the closing indications are the best, I don't see too much too different from yesterday. Here are a few Leading Indicators of interest...

 Commodities (brown) vs the SPX continue to diverge as they once again appear to be an effective Leading Indicator after a several year hiatus.


HY Credit continues to decline vs the SPX, a notable signal.

And perhaps the most expected of all after yesterday's TLT 20+ Year Bond Fund / Leading Indicator...  post.

As expected, TLT(20+ year bond fund) as well as 30 year Treasury futures both looked like they'd head higher, not just near term, but a swing/pivot. The evidence of that is in the 30 year yields above (red) vs the SPX which are lower as we said they'd be yesterday on a TLT move higher. This pressures the market lower as yields tend to act like a magnet for equity prices (and move opposite bond prices).

You might call a rotation in to bonds, a "Flight to safety trade".

From yesterday's post...

"Note the dates 1/29-2/2, TLT was topping, negative and then rolled over as the market was basing there and then bouncing. The current leading positive divergence in TLT suggests it's ready for another turn, this time up which means long term yields should move down pressuring the broad market as well...."

Here's the correlation between the SPX and TLT

 60 min TLT (red) vs SPX (green), it's nearly inverse.

On a 15 min chart, the market's base matches perfectly with TLT's top and downtrend, now there's a new TLT base.

Here's the short term chart, leading positive at the close and picked up where it left off with a gap up this morning sending yields lower and pressuring the market.

While I included a lot of charts yesterday, I added these like this 2 min positive because it keeps adding to the positive divegrence which is substantial.

TBT is the 2x leveraged inverse of TLT, this 5 min chart's current negative divergence is confirmation of the TLT base/positive divergences.

 This 10 min TLT is leading positive at a new high.

As is this 60 min chart.

As I said yesterday, I thought TLT was going to head higher and it has started to.

I think you can see the inverse relationship TLT has with the market implying very strongly that TLT is at a bottom and heading up and the market is at a top and heading down.

I'll continue to update additional assets as well as keep an eye on Greece, but with everything we saw this week culminating yesterday and now LT doing as expected, it's VERY difficult to believe we are not at the market's downside pivot now.