The Leading Indicators are incidental, I needed the layout to get the relative performance of VXX / UVXY VIX short term futures over the last 3 days so I just grabbed some Leading Indications while I was there.
Those first...
This is just a "relative performance" chart of HYG/SPX, but there's a distinct change in character to the negative side for both.
This is where the
highest probabilities have always been , sometimes we focus too much on the little lines right ion front of us to see the big picture, this is a leading negative indication in Credit that is the highest probability on a daily chart of the market following credit lower.
My "guesstimate" is that the SPX will likely hit at least <$1525 before the first significant correction.
As I always say about yields, "They are like a magnet for the market until the two reach reversion to the mean and short term that is in the white boxes, otherwise yields tend to pull equities toward them as already happened as yields were above equities last week.
This is the FXA or ETF for the $AUD, if you saw last night's "Carry Trade " post, then this chart of FXA will probably make some sense.
The main take-away from last night's post would be how suddenly the AUD/JPY went from accumulation (over 6 weeks) to very sudden distribution starting (as far as I noted) early Tuesday, although other sites say the carry trade ended after Bernie spoke, I have proof in last night's post that there was something Tuesday morning already at work, perhaps a leak?
Whatever it was, it was serious enough for them to change their minds VERY suddenly and sharply.
Here's an example...
AUD 60 min with nearly 6 weeks of accumulation suddenly reversed this week
The 30 min chart shows less history, but more detail, the accumulation was up until approx. 7/8, then as you can see again, quickly shifted leading ZH to post, "The Carry Trade is Dead", that was just based on price, we saw indications about 2-days before.
And the 15 min
The practical effect on price of the AUD/JPY was this...
Rounding bottom (accumulation) to flat out selling.
This is what I was really after-VXX/ UVXY... I've held off on calling out a new position not because of the probabilities, that's not a concern at all, the timing is.
The last 3-days the VIX short term futures have shown better relative performance than their correlation with the SPX, it's a bit difficult to see here, let me zoom in on today and perhaps you'll get a better sense.
Today's better than expected relative performance, in these instances with volatility/protection, I believe these differences are a matter of real supply/demand issues. Either way, this is bullish for VXX /UVXY and not so much for the SPX.
UVXY trend (2min) has been fine, it's tactical short term timing, today as you see added a significant upside move in 3C.
VXX 5 min- again the probabilities are not in doubt for me at all as the 5 min chows
The 15 min lends more credibility and I think this is a huge upside move based on 3C.
It's this intraday action like today's 2 min chart which has stayed my hand from calling this out as a position or add to, but we are now shaping up and not just here, but market wide.
