Leading Indicators Are Leading

In fact they are leading both short term as expected last night and longer term or at this point I think "Big picture" is a better adjective than "Longer Term", although I'm confident you know what I mean.

For example, in last night's "Daily Wrap" I mentioned an odd, late day spike in credit after it had been trending lower most of the day,

"the bigger picture of HYG's action throughout the day was very much on the bearish side, whereas the very late day action of very short duration was on the short term bullish side just like the TBT post linked above."

I was talking about the very late day action in credit confirming the very short term TBT analysis from yesterday.

 I have to fid a better way to scale the two assets as this doesn't do the reality justice, but yesterday credit was weaker than the SPX correlation, though the end of the day saw a spike out of nowhere which as I said above, I believe was a signal with regard to the short term analysis that I first espoused yesterday in this post- basically, "Don't rush, you have time". 

Today's move in High Yield Credit is showing that Credit which is typically a much bigger and more well-informed market, is not sharing the upside in the SPX  which if you recall, was created this morning after a horrible night in the futures,  by simply using the EUR/USD which also formed a tight triangle last night that I also thought would see a head fake move kind of like what we saw this morning to ramp the market RIGHT ON THR OPEN!

 Here's a closer view of HY Corp. Credit vs the SPX today, losing ground.

 Junk Credit did the same thing at the close yesterday and is performing just as poorly as HYG above, perhaps worse, never a good sign for the market.

 Here's one of my scaling problems, High Yield Credit has been flat for over 3 days, it should be scaled so it is much lower than the SPX in green, for now you'll just have to compare the two trends. Today is also seeing HY Credit take a dive after a fairly steady trend, although a negative trend compared to the SPX.

 FCT as mentioned last night is still trending in a deep leading negative divergence vs the SPX.

 The $AUD which has also been trending negatively as discussed last night in the Daily Wrap with regard to the Carry Trade pairs starting to fall apart. My guess is by the looks of things, pairs everywhere were ramped to get the market moving up.

The EUR/USD (as lined above from this morning's post) was definitely ramped and right at 9:30. Just looking at the ES futures pre-market, they looked horrible and under normal circumstances it looked like they were set to fall even more as the market (for the most part) gapped down, but the ramp in the EUR/USD is what supported the SPX, that's starting to die off a bit. Don't forget the small and large triangle in the FX pair, breaks below either will be notable events.