Leading Indicators

What I notices in leading indicators (formerly Risk Asset layout) is that the suspected head fake move above local resistance in the SPX today could have been confirmed with other evidence from leading indicators, but 3C did a good job on its own there and what I mentioned in the last post about sector rotation among the averages as the QQQ is down the hardest today, the next to go down will likely be one of the other averages.

*Comparison is always the SPX in green unless otherwise noted

 In High Yield Corp Credit, there was a positive divergence in HYG vs the SPX early in the day and a negative at the suspected head fake area, right now they are pretty much in line. This is part of the confirmation I mentioned above.

 Longer term (as in to maintain a bounce higher), HYG credit has a pretty impressive positive divergence here and now on this last bottom reversal, it should allow for more upside before HYG starts leading with negative indications.

 Junk credit showed the same confirmation of the head fake breakout in the SPX today as it failed to follow, the longer term (bounce higher) chart is the same as HYG right above this chart.

 Strangely Yields are a bit more bullish right now than the SPX intraday, we'll see if there's some closing reason why.

 The $AUD is almost exactly in line with the SPX intraday...

 Longer term (bounce higher), it has the same positive posture as HY credit, but we are still only talking about enough for a volatility move up to shake out shorts, go even longer term and it turns very ugly like the 4 hour 3C charts.

 The Euro as mentioned many times is a better confirmation currency than a leading indication, it also would not confirm the SPX's intraday attempted breakout run.

 Commodities intraday are stronger than you'd think, this is obviously part of the rotation we are seeing as the QQQ isn't commodity heavy if it has any at all of note.

Sector rotation makes this clear as well, Industrials (Dow) are in rotation, basic materials and energy (Commodities, S&P, Dow) are in rotation today, Financials (S&P) are in rotation, OUT OF ROTATION, TECH and look at the QQQ.

I think we'll see this shift just as we saw our longs for the first two days of upside shift from Tech to Financials.