Leading Indicators

Ok, we have some changes, some that have been negative are worse, some that started going negative are continuing and some that have not done anything are just starting to. I would not call the current Leading Indicators a solid reversal signal as we have seen much better signals, but it can be one of several things, the signal just isn't going to be as good as we have seen in the past due to a number of unique circumstances or perhaps they will start to show more momentum and actually look the way we have seen them in the past when they were giving the highest probability signals we have seen.

 Commodities did not act well for quite a while, now for whatever reason (there are a few possible I can think of), commodities seem to be trying to revert back to the SPY's risk level. I suspect they may kiss there and head down together.

 The move today in commodities is seen here vs the $USD, as you can see, commodities are being driven up by the invisible hand, the $USD hasn't made a lower low so commodities "shouldn't" have made a higher high, but that's what short term manipulation looks like.

 The same is true of the S&P (green) vs the $USD, the $USD didn't make a lower low, the SPX looks like it was just pushing through froth to an intraday blow-off area.

 Here we see the Euro weakening, this is all about Germany and exports, they can't afford a high Euro with Germany on the verge of a recession.

 Yields (the equity magnet) continue to track lower in a negative divergence with the SPX, this is one of the best divergences, but honestly it is still not as strong as some past ones we have seen, well...  it's a tough cal, it's pretty close.

 Here's the same, just intraday today.

 On this chart you can't se the sell-off yesterday in HY credit, you can see it in my Closing Wrap post from last night. In any case High Yield is adding to the downside and negative divergence with the SPX, which is something I speculated would happen and bleed over to Junk and HY Corp. Credit too.

 This is the over all High Yield Credit divergence, it's starting to take on some shape now beyond just intraday charts.

Junk Credit is starting to take on a little shape too as it diverges with the SPX today, this was the speculation last night, "HY credit's EOD sell-off will bleed over to the other 2 forms of credit".

High Yield Corporate actes weird yesterday in that it tracked the SPX nearly tick for tick (green arrow), today there's a very slight negative divergence, but also remember that HY Corp. Credit has near record short interest, that doesn't always translate to a short squeeze, sometimes there's good reason.