Leading Indicators Update

First, as we saw with the recent 4/12 to 4/18 decline (The volatility of which is a warning sign as there's a change inn character in volatility), Es continued to move past VERY extreme levels of mid 25's which I had not seen before to more than a negative 40 ES point differential, this suggests our expectations of a short term move up would be sold/shorted in to by smart money and a larger move down would follow, as such we want to take profits on longs set up last week for the short term move up and get ready to start selling short. Es confirms this larger outlook of our complete theory/expectations.

 CONTEXT's ES model is now at a negative 25 point differential vs ES (SPX futures) price.

The intraday SPY arbitrage seems to have been manipulated to help the upside most of the day, perhaps this is why the negative divergences (selling in to strength) have been ineffective in sending the market lower as short term levers are being used to manipulate the market higher. The assets used in this model are HYG for Credit, TLT for Treasuries and VXX for VIX futures, that's it and those are all leading indicators we follow.

HYG (VERY liquid High Yield Credit) is OBVIOUSLY being used to manipulate the market higher, here's an example so you have some idea to what extent...

HYG (light blue) is much higher now than the former SPX high, this is HYG being used to manipulate the market higher.

JUNK Credit which is also High Yield is acting EXACTLY the same, the less liquid (therefore it needs to act sooner) High Yield Credit has been supportive of the SPX intraday, it is starting to give way, but it does not have this longer term, very strong correlation that HYG and JNK do.

Yields ARE NOT supportive from yesterday to today, they are also diverging a bit negatively from the SPX intraday.

The $AUD, Euro and $USD ARE NOT supportive of the market, they are more in line with a strong move down in the market and this may be why HYG manipulation is so important to keep the market from collapsing here.

The Yen is supportive over the course of this move up, but intraday it is not supportive, yet not extremely negative either.

Commodities aere also not supportive, I find it hard to believe the market can hold up in to the close.

I see the market is giving in to the overwhelming Leading indicators that are not supportive now.