RISK Layout Update

 Thus far commodities are holding up well with the SPX.

 There's only a small divergence between ES and the CONTEXT model with the model slightly lower then ES, however not like the huge divergences we have seen recently, although this may be the start of a larger divergence.

 High Yield Credit is very cheap compared to the market and has decent beta, yesterday HY Credit was in sync with the market, today thus far it's down a bit so we have a negative divergence here.

 Other then that, Yields are supportive of the market bounce still

 The $AUD which has been an excellent leading indicator is still supportive of a bounce

And High Yield Corporate credit is supportive of more upside.

Remember a couple of things, first like I said, this bounce isn't worth doing unless it's strong enough to shake traders out and give them a good fright. Second, volatility is 100% higher then it was during the uptrend, that means the potential moves can and should be a lot bigger. Volatility is 50% higher since the last bounce in the market.

I think for this bounce to be worthwhile, it will have to cross above the trendline that was broken and cause a lot of doubt in the bears and maybe inspire some bulls to get back in the market. Anything less then a move above that trendline would simply be a test of resistance which is what bears are expecting, the market needs to do more to shake them out.