Risk Asset Update

I really anticipated a bigger move than what we have seen thus far in the market, I'll check the averages after this post and see what's going on, we still have plenty of time for a move to take hold as mentioned yesterday first in this post, "Gut Feeling".

As for the Risk Assets we track, as they often are excellent leading indicators, here's what we look like today.

First Credit, "Credit leads, equities follow".

 High Yield Credit, a risk asset that should follow the SPX failed to do so here as the SPX moved higher.

 Relative comparisons of HY Credit and the SPX shows credit making a similar low while the SPX stays above the same low.

 High Yield Corp. Credit is not performing well, also not following the SPX on the risk move that is fading.


 Junk Credit didn't even move.

 Yields which are like a magnet for the SPX are negatively divergence

 Longer term Yields divergence.

 The $AUD didn't move much unlike some other pairs.

 $AUD longer term divergence with the SPX, Carry Trade is off, not good for the market.


 The Euro did rise and was even positively divergence before the minutes, this may even be what causes the short term positive divergences as they often follow the EUR/USD pair in arbitrage analysis.

 The $USD on the minutes release.

 Longer term sector rotation, while Financials may look very strong, they also look peaked out and ready to turn, the safe haven Utilities, Staples and Health Care look as if they are ready to rotate in. Energy seems to be coming off peak rotation and going out as does Basic Materials and Industrials. Tech is hard to say as is discretionary.

Since the minutes...

Financials are seeing some pressure, Utilities, and Healthcare are coming in a bit, Energy is coming in on the weak dollar as are Basic Materials, Industrials are fizzling out, Tech seems to fizzling out as is discretionary.

All in all, the findings haven't changed much, there are a lot of negative divergences here, nothing really leading the market to suggest any health here.