Market Update

I thought I'd lead with this because this was my very last warning in my very last post, from none other than Bill Gross of the Largest Bond Fund in the world, PIMCO...

As for HYG, I want to be VERY careful, HYG has done EXACTLY what I suspected, which is to sell any bit of strength in a risk asset that should be moving with the market, it is severely dislocated over the last couple of days, but as I said yesterday, the short term accumulation in HYG would lead the market higher, this is not correlation, this is outright planning and manipulation, yet sellers seem to be ruining the party as I expected.

I need to be careful not to assume my theory was correct based on the initial results, there's enough accumulation in HYG to  send it and the market higher, there's not enough to repair the massive damage done the last 2-3 days so cautiously optimistic we are on the right track.

 HYG is now nearly back at the lows it was accumulated from, my theory was HYG would be sold early or earlier than the accumulation period suggested, I said this yesterday and so far today that has happened, but I'm not doing any victory laps on that line of thought until I see a definitive break.

 TLT's direction has allowed the market to hold-off the upper VWAP where they'd like to sell, but to hold higher where distribution has been evident, the thing is TLT is accumulating enough ammo that it can change direction whenever it wants and totally change the arbitrage correlation to very market negative.

The exact same is true of the VXX.

Now I have a lot of other assets to look at quickly.