Risk Assets/Context

Again we are getting a mixed bag in the Risk Asset indicators, most of which are leading. There remains a divergence between the performance of high Yield Credit and High Yield Corp. Credit. Context for ES looks to be about fairly valued, while the SPY arbitrage suggests the SPY is undervalued. All in all a mixed bag, it almost seems (and this wouldn't be unreasonable), that the market is in a short of holding pattern awaiting both the Greek election results and the F_O_M_C policy statement due this month. We also have triple witching options expiration, so there are quite a few under-currents, some are not discountable by Wall Street, just recall the surprise at the last Greek election when Syriza out-performed and did so well that it upset all assumptions that a pro-bailout coalition would easily win and this doesn't even take in to consideration the wild card that is Europe, whether it be rumors, policy announcements or unforeseen consequences of policy announcements.

 CONTEXT's SPY Arbitrage shows the SPY undervalued here.

 As for ES, it is bouncing back and forth and I'd call it pretty much in line for the most part.

 Commodities today are seeing good relative momentum vs the SPX, however...

 Longer term commodities are underperforming significantly as they have been doing since late last year. There's a down trend channel and it may just be a brief spike, but coms are just above that channel, it could be the start of a move higher or simply noise, but it's worth keeping an eye on.

 High Yield Credit while somewhat in line with the market today, dropped overnight, yesterday it wasn't performing that well either.

 Note the strong signal in HY credit at the SPX lows, then in red a lot of damage was done in one day, there are some higher lows, it remains to be seen if we get a higher high in the yellow area, as it stands HY credit is divergent from the SPX and this is a bit worrying.

 Yields intraday are seeing decent momentum

 Longer term they are just about in line.

 The EUR/USD since the 9:30 open

 And here's major resistance-this is a very important area, yet it feels like "So close, but still so far away". A definitive break above this resistance area would change the entire tone of the market to a much more bullish one, however remember what the primary trends look like, this is why I have kept the core short positions. Right now at last check all of the core shorts are still in the green and almost all of the speculative leveraged longs used as a hedge for the shorts are also in the green.

 The $AUD intraday vs the SPX is just starting to see some downside momentum pick up.

 Longer term the $AUD is in a good position

 The Euro seeing intraday downside momentum.

 Remember the sell-off yesterday while we had signals suggesting it hours before? I wondered last night whether those shares were picked up on the cheap, it seems they were, whether just for a short term trade or? In any case the Euro didn't see the same downside so it stuck out to me as some short term manipulation or more accurately a shakeout.

 High Yield Corp Credit is performing much better than HY credit.

 Here you can see a new high in HYC credit. All in all this area since the 7th seems very messy and unsure.

Sector rotation over the last several days (click on the chart for a closer view.)