Back to our Credit/Risk Asset indicators. I have recently said and will repeat, I think this layout combined with what 3C has been showing, will prove to have been very valuable when we look back, so I would urge you to consider its value now while it still matters.
While I have most timeframes set to look at the probability of a top rolling over, I did want to see if High Yield Credit was moving with the market at all this morning, as you can see, it wants nothing to do with any move up. This is important because the credit markets are much larger then the stock market and they are played almost exclusively by the professionals, as they say, 'credit leads, equities follow).
The market is as I suggested earlier, perfectly in sync with the Euro/USD.
Now for a look at the timeframes that should answer our question...
The Euro is severely dislocated longer term, but intermediate over the last several weeks, we see it peeling away from the SPX.
Even though rates are near all time lows (rates act as a magnet for the market), when looking at the last several weeks, they too are rolling over flashing a warning sign.
Even financials which have had a good run since the end of Q4 are rolling over and the market can't get far without them.
High Yield Credit...
Commodities...
All rolling over. The market shouldn't be far behind, but as I mentioned late last night (or very early this morning), keep your eye on the trend, the intraday and daily gyrations right now have little meaning compared to the trends you see above. I personally would be using any strength to initiate or add to short positions.
No comments:
Post a Comment