Leading Indicators

Yesterday as I showed you in this post leading indicators were unambiguous about the mid-day change in character in the market that led to some late day gains off the afternoon lows.

Looking again right now, as I might have expected with the TICK diverging and the intraday charts positively diverging, there are also positively diverging Leading Indicators, among them: High Yield Corporate Credit, Junk Credit is diverging even stronger, High Yield Credit as well, Yields and Commodities are also in intraday positive divergences.

The only thing that is more or less in line intraday is the SPX & EUR correlation, which seems to be the driver of early trade.

The two are moving nearly tick for tick so far, downside in the Euro typically correlate to the same in the market, even though the two have been divergent over the last several days pretty badly on the downside (for the Euro).

Here's a look at the EUR/USD pair for the week thus far, you can see the downside this morning in the pair.

As for futures, the pair looks to have a positive divergence forming.

ES is still improving and NQ is finally showing the first signs of improvement in 3C/underlying trade.

Among the averages, it's mixed, I think it's going to be a little more of a process than an event and sudden reversal, there will likely need to be some lateral trade before a serious reversal that can hold takes place.