Leading Indicators

We've used this set of leading indicators for a while because they are quite useful, especially when they are giving consistent and strong signals. For the sake of time, I'll update some verbally as there's not much to see and show some charts as there is a lot to see.

As for HYG (High Yield Corporate Credit) as credit often leads the market, "Credit leads, stocks follow",  HYG has become a market manipulation tool, one of three assets that are used including the VIX smack-down and TLT, the three used together (HYG up and VXX/TLT down) is used to push the market higher , but as a form of manipulation causing algos to think there's a risk on appetite, but it's really just a lever to manipulate the market short term like the VIX smack-down we often see EOD. This trio is called the "SPY Arbitrage".

In any case, HYG is pretty much in line and not telling us much, HYG itself as an asset does have negative divergences, especially since the move above $102.

High Yield Credit is slightly negative vs the SPX, this is a market negative, but not a screaming signal right now, however these often make large moves at the EOD.

VXX is pretty much in line with the normal SPX correlation, however, again, VIX futures have been under constant positive divergences/accumulation for some time as I showed in an earlier post this morning.

5 min VIX futures showing accumulation again today.

Other Leading Indicators...

 As for near term pro sentiment, it's turning more negative.

Our second sentiment indicator is also turning negative vs the SPX,

However, the real tell for the market is the trend of the sentiment indicators...

 This shows how very negative the pros have gone, especially recently through April

 This is TLT vs the SPX (SPX prices are inverted to show the normal correlation) intraday. You can see the divergence in TLT that caused me to post this TLT, 30 year Treasury Futures & TBT Update yesterday and we were right on, not that it made any difference to our position if you read the update.

 Yields are one of my favorite Leading Indicators, this intraday negative typically acts as a magnet and pulls price toward it, but on an even larger scale...

 Like sentiment, Yields are calling for a large turn to the downside which fits with what we've been seeing, not the least of which includes the multiple trend analysis which is rare to have 3 trends all in different timeframes line up.

This should be a different post, but because I just mentioned it a post or so ago...

 This is an intraday negative in USD/JPY and as far as the component currencies...

A negative in the $USDX as I mentioned and a ...

leading positive in the Yen, that would have the effect (once prices followed the forecast of the divergences) of pulling the FX pair and market lower.