Risk Asset Update

It's early to look at the risk asset update layout, but considering, I thought I should take a look. There are some warning signs and there are some signs that look like confusion, although I doubt that is what they truly are.

 High Yield Credit tends to be one of the first choices for a risk on move among the many different forms of credit, however HY credit hasn't made a higher high with the SPX in 2+ days now.

 Yields tend to act like a magnet for equities, this very sudden and sharp drop is something we'd normally take as a warning or reversal sign for the market.

 Here's the same chart on a longer timeframe and you can see the SPX reversal to the downside on a little longer divergence in yields, but not as sharp as today's thus far.

 A break in the correlation between the SPX and the Euro is also normally taken as a warning sign that the SPX may be getting ready to follow the Euro, here the Euro has a pretty sharp break down.

 On a longer time frame you can see where past breaks of the SPX/Euro correlation have led to market reversals to the downside, this one is pretty deep already.

Sector rotation is where it appears there's confusion, usually either we have a risk on sector rotation or a safe haven rotation, here we have both with Financials, Basic Materials and Tech to some degree, rotating in, but at the same time, Energy and Discretionary aren't following. On the safe haven side, we'd expect rotation out, instead Utilities and Staples are both rotating in.