Leading Indicators

I don't see any real problems with leading indicators whether we are looking at a volatility bounce/rally/shakeout or what comes next. This will probably be the last Leading Indicators post for the day as it takes up some time. Next I'll be focussed on the stocks that may move from one candidate or another, I think this is as good a time as any considering the close.

 Commodities for once are doing pretty well today vs the SPX with Gold and Oil moving well, in fact I'll have to take a look at the gold leveraged long position and see what we might want to do with that as it is at a slight profit.

 Longer term commodities were not that far off the mark during the range section of the market and aren't that far off from Friday's false breakout.

 FCT 5 min from the mid October rally highs was negative as it turns out to be a decent leading indicator, there's a nice positive divergence during the range and it carries on right through Friday and this week.

 Yields are in line today, maybe showing even a little better relative performance on the day.

 Yields which are like a magnet for equity prices were negative at the first and second SPX little triple top and it was positive at the 3rd as well as the range after the 3rd and overall for the near term which is hard to define, but I'd say a move of probably close to a month, perhaps more.

 Long term Yields were one of the signals that got us short in March, April and May 1st, the reversion to the mean at the June 4th low along with all of the positive divergences saw us opening long positions, I decided to keep core shorts (or most) and hedge them with leveraged longs which was based on guess work, but the hedge was near perfect as it actually made money and protected some shorts that later served me well. However the big picture here is a severe dislocation and ultimately the reversion to the mean indicates a VERY nasty move down for the SPX-that is stage 2 of our current market expectations and plan.

 The $AUD as you know is my favorite leading indicator of the currencies, today it's working well intraday.

 The $AUD also was negative at top 2 and became more positive going in to top 3 and the range after top 3 as well as the current positioning, in my view this argues for a move to the upside in the market.

 Here'a little longer look at the $AUD and the signals from confirmation to relative negative, leading negative and positive currently.

 The Euro is a better confirmation indicator among the currencies than a leading indicator, today it has held well with the market intraday.

 As for Credit, High Yield Corporate is working well intraday with the market, surprisingly if I had to guess where it would be without having the chance to look at the market, I'd guess it would be down as traders looked to decrease their exposure to a wild card event.

 Junk Credit is of course High Yield, it is also looking decent intraday.

 HY Credit looks decent through the range and better since Friday's head fake move and everything that has come since then. Again, the fact it's not running to the downside, scared, says something to me.

Sector rotation lately over the last 3-4 days shows a clear trend of risk sectors moving in such as Financials, Energy, Basic Materials, Industrials, even Tech which has been lagging and the safe haven areas like Utilities, Healthcare (which is interesting considering the election) and Staples have been clearly moving out.