Leading Indicators

To save time I'm not positing charts, but we have a good intraday divergence in HY Corp. Credit as well a a longer term and in Junk Credit as well.

The $AUD is showing a very nice intraday positive divergence and as you know this is one of my favorite leading indicators among the currencies.

The Euro is showing clearly why the market has been just range bound or treading water.

Yields also have a nice positive divergence short term and an even more impressive longer term (Swing-or like the move up we have been looking for).

High Yield Credit which has been stuck, glued to the SPX is also diverging to the upside for the first time in weeks today.

As for sector rotation, as mentioned yesterday, Financials looked to be at the low of their rotational cycle and they are up today showing better relative performance vs the SPX than yesterday, Tech is rotating out vs Financials so that also is a theme touched on yesterday, the momentum stocks of Basic Materials are seeing that sector come in to rotation today as it was WAY out yesterday, everything else is unremarkable except defensive sectors are continuing on the rotation from yesterday except for Utilities.

From looking at the Leading Indicators only, I'd guess we are going to see a risk on move VERY shortly, possibly at the F_O_M_C.

We also had a number of risk indicators flashing in the on position yesterday.

I'll be looking at the balance of my positions and try to maintain some hedge a no one can predict the F_O_M_C, unless these signals we are seeing are some sort of leak, but if I can without upsetting the balance of the short positions too much, I'd like to add to leveraged long positions BEFORE the FOMC.