Keeping it Real

It's no secret I'd love to see a bounce hit a new high and be able to short in to that move-the last part is the important part-"Short in to that move".

In that spirit, I don't want to confuse or mislead anyone in hoping to see the market move higher, the only reason is so I can or we can execute tactical trades based on our strategic outlook and this chart is 1 simple chart that wraps up the big picture (strategic outlook) in a nutshell.

The red, green and blue lines are equities and high yield credit (HY Credit is a cheap way for large institutional traders to take advantage of a swing up in the market). The one that is maroon colored and not moving up with the rest is the higher quality Investment Grade Credit. The rule of thumb is "Credit leads equities". On a day like today you'd expect a little movement out of the safer assets like IG credit in to the higher beta High Yield Credit, but that's only part of the story-the flight from safety to risk.

The bigger picture here is IG credit is selling off, this is not good for the market's big picture. As most of you know it has been my gut feeling we'd see one more decent bounce, but after that, the market is in trouble.

Be ready for when market trouble come swinging back around, it is likely to be faster and more furious than anything we have seen in the last 3 years.

I'll be taking a look soon at our Risk Asset Layout as well.