Risk Asset Layout

I was hoping this layout and these indicators would hold up during a pullback, they haven't performed in the best case scenario, but overall I'm VERY happy with where they are at today.

Commodities- With no QE announced, commodities were bound to take the brunt of the selling action, perhaps even worse, Manufacturing reports from China, Europe and the US all released overnight or today were horrible, not exactly the kind of environment that supports commodities.

 Commods intraday vs the SPX.

 Commods intraday vs the Euro

 Commods and the sub-intermediate trend, performing a bit worse than the SPX overall, but I think that's understandable.

 From left to right on this daily chart of commodities vs the SPX, note in 2010 Commods were hit first as QE expired, when the Jackson Hole speech came out and QE 2 was evident, commodities took off, when QE2 was drawing to a close, once again the bearish tone showed up in commods first. Operation Twist does nothing for commodities and the slowdown in China has become evident over the last 6-9 months, it's little wonder commodities are performing so horribly vs the SPX currently.

 High Yield Credit has ben the problematic asset on this layout over the last week, I'm very happy to see it holding up very well vs the market, this further suggests that although very volatile, we are seeing a pullback in the market, which means we still have strong probabilities for further gains after this pb runs its course.

 As mentioned yesterday, "If HY credit can hold up and the market pulls back, they should meet-reversion to the mean or confirmation", that is what has happened today.

 HY Corp Credit has been holding up better than HY the last week, intraday its in line with the market for the most part.

 With regard to the sub-intermediate trend, HYC credit is still holding up well, again suggesting we are looking at a pullback as has been expected the last 2 days.

 Yields pulled back intraday, but are performing better on a relative basis than the SPX, this is also good news.

 And like HY credit, the pullback in the SPX has caused the 2 to revert to the mean or confirmation.

 $AUD is nearly in perfect sync with the SPX, as long as it is not negatively divergent, it's fine with me.

 The Euro/SPX intraday

 On a sub-intermediate basis-looks fine for me.

Sector rotation (relative to SPX momentum) shows defensive sectors rotating in, that's no surprise. Industrials, and Tech are a bit stronger than I'd expect.

Overall, I'm happy with what I see here and it should give us some good opportunities.