The Week Ahead

Here's a look at Leading Indicators first.

 HY credit is in line on the downside with the SPX today, it's not leading (at least this particular asset) like I'd like to see, but it is in line.

HYG as we showed well over a week ago was falling apart, now price has, this is a true leading indicator and price is now catching down to it, but remember that HYG is already in a primary downtrend, the market still owes a catch down to a primary down trend.

Short term my custom SPX:RUT ratio is showing intraday support, meaning it looks possible for early upside next week like we forecasted last week, however this is 1 indicator and a very short timeframe.

Short term VIX futures (VXX) are lagging a bit, SPX prices are inverted and VXX should be up where the SPX inverted price is so that's another short term chance of early strength next week, but I would not trade long on that, if anything I'd use it to sell longs in to or to short in to.

Spot VIX is right in line and fine.

Yields are leading a bit today, but this is because of the probability of a June rate hike increasing today, I wouldn't think this would act as the usual magnet for that reason.

Here's TLT vs inverted SPX in green, in white TLT is showing strength as we have recently come to expect after closing the TLT short this week, today it is weak, again on the possible early rate hike on today's payrolls data, the last payrolls data before the next F_O_M_C meeting.

And inverting TLT vs the SPX, gives you some idea of what the long end yields look like considering the bond market closes at 3 pm

Commodities as suspected, have returned to a leading indicator, big picture negative.

Intraday TICK has been nasty and extreme as mentioned earlier, but since 12 pm it has let up quite a bit, the panic selling is not as strong.

 If there's a chance for the charts to pick up where they left off, this 1 min 3C SPY chart is about it, early Monday/early week (Monday) strength or bounce, but that's very dangerous right now with the margin debt as high as it is as a downside follow through day is increasingly high probability as record levels of margin debt will cause traders to have to liquidate positions, but that's where the best chance resides, it's about the same as last week, but not in such a weak position as last week.

Again, other than intraday, I would not trade this long, but sell or short in to a possible bounce.

 SPY 2 min has nothing, so there's no strong divergence built up that can power through the early part of the week right now.

3 min is in line and even worse.

10 min ..Do I need to even say it?

And the 30 min chart shows where it was safe to start taking action on the short side, I wouldn't trade against this chart.

The market likes to throw traders off track by doing things like bouncing and getting longs to believe that buying the dip is still the right course of action, but beyond that, I can't give you a much stronger case than the above.

I still believe TLT moves higher.

VXX/UVXY should move higher through next week, but short term confirm the possibility if not probability of an early week bounce (Monday).

I have some other reasons for believing a bounce early in the week is a good possibility, but I still would not chase it or trade from the long side but sell or short in to it at the right time.

That's pretty much that, much like last week except we are not only in stage 4, we have completed it to some degree in a single day (taking out the head fake in several of the averages).