Risk Layout Update

If I'm not posting for a bit, know that it is because I'm running through charts, running scans, etc. I have been going through the risk asset layout which is a pretty extensive update with a lot of charts to capture and post.

I see general deterioration in some key metrics that have long served us well as leading indicators, I also see some contradicting moves or moves that just seem, well... confused or maybe apprehensive is a better word.

Here we go...

First CONTEXT for ES...

Now the Risk Asset Layout...

 Commodities seem to finally be falling off, that may be because of rumors going around that China will have a bad Flash PMI print overnight.

 DJP- Dow Jones UBS Commodity Index looks like it briefly hit a resistance area this a.m.

 Here's a closer look, yesterday's high volume on not much of a price move is also curious, while the candlestick for yesterday is not bearish, it's not very bullish either. This high volume has the look of churning or the handing off of shares from strong hands to weak hands, an event that typically precedes a downside reversal.

 High Yield Credit which is the risk on credit of choice has broken below it's nearly 3 day long range as it would not make higher highs with the SPX, today we see it lower.

 Here's a slightly longer view and shows how divergences in Credit are often an excellent leading indicator.


 Interestingly High Yield Corporate Credit which has also been rather flat recently made a move above the very recent highs, I'm very interested to see how this closes, a move back below the trendine would signify the increased potential of this being a head fake move and leading to a downside reversal. It is strange to see two forms of high yield credit moving the opposite directions.

 Yields I have explained are like a magnet for the market/SPX, they tend to be an excellent leading indicator and now for the 3rd day they have negatively diverged away from the SPX, this is not a good sign and has called many reversals for us in the past.

 A longer view example of Yields and diverging away from the SPX.

 The Euro is still dislocated from the SPX although it saw some strength since yesterday's close, albeit minor.


 Energy has made a sharp move lower vs the SPX's momentum today...

 You can see USO looks to be one of the causes on this 5 min intraday chart.

 Financials overall over the last couple of days have seen their momentum also fade vs the SPX, I consider Financials, Energy and Tech the 3 essential Industry groups to maintain a healthy move.

 Tech is moved up in line today, most of that move looks to have come from AAPL below.

 AAPL is still within the bull flag, I'll be keeping a close eye on AAPL.

The recent sector rotation over the last 3+ days shows how confused the market looks, just looking at the action in the defensive sectors as there's really no trend there when there should be one, or looking at financials at the bottom. Tech is the only group that seems to be able to hold on to any rotation.