Leading Indicators & Market Update

Interestingly, not only did 3C forecast a near term bounce yesterday, but the Dominant Price/Volume Relationship from yesterday's Daily Wrap...

"The dominant price / volume relationship came in at Dow 14 stocks, NDX 51,  R2K 952, SPX 218. This is a dominant price/volume relationship which came in at Close Down/Volume Up. 

This relationship is a short term oversold condition, not the kind of oversold that is represented by indicators such as RSI, but much more accurate based on market breadth. 

The most common bias is for a next day close higher, in line with our 3C short term indications."

In addition, Yields were also leading toward the close which I demonstrated using TLT as the bond market closes at 3 p.m., again from the Daily Wrap

 This is yesterday's TLT chart posted (inverted in red) vs the SPX. Note the leading positive position of yields in to the close yesterday.

Yields today are supportive, remember they tend to attract equities like a magnet , but also remember this is only intraday, the longer term posted the last several nights shows an extremely negative situation.

 5 year yields intraday in perfect correlation with the SPX.

This is 5 year yields leading the market lower in to the highs and then  a "SLIGHT" positive indication for near term market support (the bounce we forecasted yesterday-very short term) which is off this morning's "V" bottom.

Interestingly, it looks like this move had VERY LITTLE TO DO WITH IRAN. First of all we had indications in 3C, yields, internals, etc. 

At #1 is the VIX's reaction to news that Iran had captured a US flagged ship. However at #2, almost 45 minutes before it was made clear it wasn't a US ship, someone was already slamming the VIX (common to see when they are trying to ramp the market). At #3 we find out the ship was not US.

Our custom SPX:RUT Ratio was also positive as of yesterday afternoon and then more in to this morning's "V" lows and in line since, of course the long term outlook of this indicator is very negative for the market.

It's just interesting how many little levers and indications pointed to this bounce off yesterday's ugliness.

 It's not all strawberries though. Our Leading Indicator Pro Sentiment is NOT buying the move today which is in line with my assumption this is a weak, "V" based move that won't hold much for long, a fitting move at this moment in the process since the April 2nd forecast.

HY Credit is also NOT buying the move.

As to the averages... intraday weakness is setting in which should have been expected off a "V" base.

 SPY 2 min

QQQ 1 min

QQQ 3 min

IWM 1 min

IWM 5 min.

I have some watchlists to go through.