Credit/Risk Assets

 Commodities as pointed out yesterday didn't rally with the market but instead sold off from the open, closing near the lows of the day. Today they have been largely in line, but show, as the short term USO chart did, a little better recent relative performance, suggesting an intraday bounce most probably in commodities as well as equities.

 The longer term dislocation shows commodities acting very badly in this "Risk on" bounce and this is the kind of dislocation we want to see when adding to or starting new shorts on equity price strength as the other risk assets are not confirming a true "risk appetite".

 High Yield has been largely in line with the S&P today as would be expected.

 Yields have continued the sell-off started yesterday and as they should, equities have gravitated towards yields.

 The larger picture shows an extreme dislocation between yields and equities as yields have not been able to make a new high throughout the equity bounce, which leaves a severe dislocation and a lot of downside for equities to gravitate toward yields.

 The Euro intraday is outperforming equities thus far, which also suggests a bounce in the market as legacy arbitrage black boxes by "perceived" value in equities.

 Long term the Euro has not made a higher high throughout the bounce and remains severely dislocated from the stock market

 High Yield Corporate Credit  has been in line with the S&P since late yesterday.

 However from yesterday's open, it did sell-off.

 It also remains dislocated on a longer term basis, which is what I'm looking for in these indicators as an entry point for shorts.

 Financial momentum today has been on par with market performance.

Although it has lagged badly when looking at the bigger picture.