Leading Indicators / Core Positions

From what I see, I'm going to spend the last hour focussing more on core positions (long or short, but I think there will be many more short positions), this means positions that are typically without leverage and are meant to be trending trades.

First currencies, we already know that the multi-year carry trade/market correlation that has been spot on is at least 80-80 ES points out of whack, there are changes in trends, but I don't think a short squeeze and 5 days is enough reason to assume the correlation between the carry pairs like USD/JPY are over.

Looking at the pair...

 USD/JPY intraday looks like it's getting ready to make a move lower

The Yen has moved a strong positive divergence all the way out to a 60 min chart and it has an appropriate base for the divegrence, this would send the USD/JPY pair down and the correlation between the Index futures and the carry cross have been nearly tick for tick for years, again it can be changing, but considering there's no accumulation on the move (as it should be with a head fake move) and powered by short squeeze alone, I can see how they'd separate briefly, I can't imagine what the reversion to the correlation would look like, all in one dump or something else.

If you check my articles "A currency crisis" written in April you will see way back then I thought a rise in the Yen would accompany a fall in the market and a 60 min positive in the Yen is something we haven't seen for some time.

 Meanwhile the $USDX on the same timeframe is in line with its downtrend.

The 30 min Yen futures is also positive leading at the same place

The $USDX is in line with its move lower.

The 5 min Yen is in line as it has just started a move to the upside coming out of the bowl on the 30-60 min charts.

$USDX intraday is in line

 While the Yen went from negative to building a positive divergence (early)

I've been hearing the EUR/USD is the current correlation and while directionality is correct, the correlation is far from it, but just in case it has anything to do with driving the market...

 The 5 min EUD/USD trend is negative

There's a slight negative on the intraday Euro futures.

And a clear 5 min negative in the Euro futures, so if the EUR/USD has anything to do with market support, it doesn't look like it will be supportive much longer.

 The VIX futures have been positive and moving to longer charts, this is all the way out to the 60 min chart for actual VIX futures, not spot, not ETF. This shows a massive move toward protection from a downside move.

TLT which is the long bond/flight to safety has been and is still outperforming the SPX correlation (SPX's price is inverted), normally with an inverted SPX, the two would be as 1 line.

 Interestingly today, High Yield Credit just fell off a cliff to 1 week lows in one fell swoop. That's the kind of move bulls don't want to see in the SPX, a week's worth of gains erased almost instantly, but that's what happens with volatility on the rise (remember the 1929 example of the first 4-days, that's when there were quite a few jumpers as margin calls came in).

The significance of credit of course is that its a much more well informed market, hence the saying, "Credit leads, stocks follow".

 Finally, one of my favorite Leading Indicators, Yields, the majority of the move out of the head fake bottom has been at odds with yields, right now we have a minimum reversion to the mean of about $1760 and that can pop very quickly.

With the major drivers looking like this and the price levels where they are, it seems to be a good use of time to be looking at trend positions.