Quick Leading Indicators Update

As far as reversals from the past due to Leading Indicator dislocations or divergences (Leading Indicators are mostly risk assets that in a healthy market move with the SPX), I'd say we'd have solid reversal signals on about 1/10th the size and time of what we currently have, which tells us this is not a typical correction coming and we are in a very extreme market.

HYG-High Yield Credit thus far has seen selling earlier than it should have which is what I was looking for, but Junk Credit (which is HY because of the risk) is performing even worse and it has no correlation or use for the market in the way of a lever, it typically trades like HYG-almost exactly, it looks worse today and HY credit is falling again today, much worse than what we saw yesterday near the close.

FX I already mentioned, I'm a bit surprised the Euro and AUD didn't hold up better, but that's in the back pocket if volatility is needed and I'm surprised the Yen hasn't started a new leg higher, the $USD did today.

Yields which I call, "A Magnet for Stock prices" were positive yesterday and should have helped the market, short term the market moved right to them today just like a magnet, however the longer term is where the problem is at and we are obviously getting in to the area where the longer term reckoning can pop up at nearly any moment with the Hedge Fund herd split.

Here's an example of the longer term due to F_E_D intervention, but remember as I have been saying since September and the WSJ has been told to leak now, the F_E_D will unwind that accommodation and reversion to the mean in Yields will be worse than it is pictured below...actually I can't say that because no one has any idea how the F_E_D will treat rates on normalization of policy, 17 consecutive 25 basis point hikes like last time or a bigger move up front?

 Short term SPX reversion to the mean with Yeilds-which are high because they move opposite treasuries and we know what has been going on with them the last weeks and month.

Longer term reversion to the mean-the SPX has a long way to go.

Commodities are underperforming a bit as would be expected with dollar strength, yet the market remains resilient, that can easily be explained in the 3 levers or a look TLT, HYG and VXX intraday which we'll look at in more detail as HYG is really important right now to us.

As for CONTEXT, it looks much different then it did on the open Sunday night.