Risk Assets

A couple of quick news items, the F_E_D's Plosser spoke today saying,  he does not want the Fed in a position where it is expected to purchase bonds to manipulate securities.

I also wanted to follow up on my UNG post-UNG is outperforming today and is now up 3%.

The last time I checked, volume today on the NYSE was average, volume on the NASDAQ is above average. As for Advancers and Decliners, decliners outpacing advancers (NYSE 1391/1607, NASDAQ advancers/decliners 925/1528) 

Commodities...

 Optically commodities are in line with the SPX, there have been serious declines in precious metals (GLD down 4% and SLV down 5.5%) As a side note I will be selling my GLD Put in the model portfolio as it is at a 215% gain and look for a bounce to re-enter.

 Commodities on a longer scale, note the 4 month divergence in commodities preceding the 16% decline in the market, the divergence is even worse now. However when looking at historical charts, sometimes we don't appreciate the scale of the divergence and it is hard to put ourselves in that moment.

 High Yield Credit is selling off today, it should also be noted that European Financial Credit has continued to sell off, I suspect in the US as well.

 Longe term, there hasn't been a higher high in HY Credit for quite some time and has been selling off as I pointed out in last night's "Daily Wrap" post.

 Even longer term, HY Credit was divergent for 2 months before the late July -16% plunge, it's underperforming in this rally and noticeably recently.

 The market was roughly in line with the Euro earlier intraday, since the market has diverged away from the Euro. I'll take a look at the dollar more specifically.

 A longer timeframe shows the divergence between the Euro or EUR/USD and the market with today worsening.

 Long term again, the Euro declined faster in the summer of 2011 leading to the July decline, it is much worse now.

 Sector performance today shows financials about in line , defensive sectors like Utilities and Staples have outperformed, the decline inBasic Materials and Energy is noticeable as well as Tech which is a rarity. Discretionary is performing a little better, I assume because of the Consumer Confidence report yesterday.

 Here are financials vs the SPX, as I mentioned, just about in line.

Longer term, Financials are not doing well vs the SPX.

The TICK chart has shown the volatility I expected today, however we saw some -1500 readings which are quite large and I don't believe we have seen those until today.