Credit Update

Credit is important because this is one of the main assets institutional money trades, like we might trade the SPY or the Q's, thus Credit tends to lead the market, hence the saying, "Credit leads, stocks follow".

HYG is probably the most popular choice as it has huge liquidity and diversity that just can't be found trying to trade credit or a credit basket as the banks have largely sold them since 2008, making it very difficult to get a diverse position and there's certainly no liquidity, so HYG is their choice to express a risk posture like we might buy SPY, etc.

 Intraday, this is the 2 min HYG chart

This is a closer view of the same, just to get a better look at today.

The 3 min intraday

The 5 min, it's not the negative/positive divergences, it's the trend and size of each and where in the trend.

The 5 min HYG chart makes the trend cleaner, easier to see and tells us more about the size, while not huge, definitely respectable.

The same with the 15 min charts.

The High Yield DHY is very illiquid, yet the 10 min trend is VERY clear.

DHY 10 min

This is FCT which we use to measure risk sentiment, not like the retail sentiment from the twitter stream, note the direction of price and the direction of FCT, also a nice move this morning, just moments ago actually.