A Look at the long term 3C charts.

How has the marekt performed since QE3? We certainly haven't seen follow through.

 The SPX has nearly retraced all the QE3 gains.

 The "Risk-on" Russell 2000 has retraced all QE3 gains and then some.

 High Yield Corp. Credit retraced its gains days ago and has added more to the downside-remember, most often, "Credit leads and equities follow".

 Yields retraced and are in a much larger negative divergence, yields have called some large reversals this year via dislocation/divergence with the SPX.

And commodities which should have reacted well to QE are seemingly reacting more to manufacturing data.

I've been looking at post QE3 data to try and figure out whether smart money priced it in or whether they'd accumulate on a pullback, in the mean time ignoring the longer term 3C signals until that is settled, but it can't hurt to look at what the important 3C charts have been saying.

 The 60 min SPY chart called the March-May top as did many other timeframes at the time, it also called the June 4th bottom, this most recent leading negative divergence is by far the worst we have seen.

 The 60 min DIA called the May top, the June bottom and again is showing by far, the worst divergence on the chart.

 QQQ also with a deep leading negative divergence

And the IWM, well, it speaks for itself.

If indeed smart money is underperforming because they've been selling/shorting in to QE3 advance discounting, then they really aren't doing anything different than what we try to do, sell in to strength, but in their size, it takes more time and demand.

I haven't seen too many long term 3C charts that were wrong and they weren't wrong at past QE periods. 3C is essentially telling us what the money flow in an asset is right now vs some point in the past, I'm not sure a QE3 announcement changes that basic function and I'm not so confident we should be ignoring these signals. This may in fact be one of the largest mass migrations of smart money toward de-leveraging and/or the short side we have seen since 2008 and in some ways, it looks even worse.

I'll continue to watch for mass accumulation on price weakness, but thus far, it just hasn't been there. Today's movement in price was so quick that some longer 3C charts need time to catch up, but as a member mentioned the other day, perhaps the massive hedge fund underperformance of the SPX (92% of all funds) isn't the entire story as their year in't over yet and we see how fast the market can move when it wants to.

We haven't looked at these charts seriously since QE3, I thought maybe it's time we just take a look.