Leading Indicators

Earlier I mentioned I hadn't seen leading indicators yet, but with the way everything else is looking, I couldn't imagine that they looked any better and I was right on that count.

First one of two markets is wrong or there's a fundamental shift occurring in the Treasury market correlation, Treasuries are acting like there's a massive flight to safety trade, from everything I've seen I'd agree with treasuries because when T's and equities are both up, I'd go with Treasuries, but we have so much more evidence than that alone.

It's not just the US, but German safe haven Bunds are bid as well.

Here's a look at some of the Leading Indicators telling us that our earlier analysis of this week starting off pretty ugly, is not just skin deep.

 We were talking last week about "Broken Levers" in A Few Broken Levers ; HYG which has been the go-to manipulation asset of choice among credit was showing signs of a breakdown there, it certainly seems those signs were right on target as you see HYG above today completely diverging with the SPX to the downside.

High Yield Credit is another that wants no part of moving higher and these are institutional risk assets, other larger credit markets look even worse, I'll try to get a chart of those up.

TLT, the 20+ year Treasury fund is moving up with the SPX, this is a "Flight to Safety " trade, this is not a normal correlation, it's 180 degrees opposed to normal, this is what we were seeing last week and why we closed out the TBT (TLT UltraShort) long position... Closing TBT (long) For now

As mentioned above, this is not just US Treasuries, but German Bunds that are bid as well.

 As for one of my favorite, Yields which move opposite the price of Treasuries and they tend to pull equities to them like a magnet, here you get a larger view of the dislocation (negative for the market) of Yields vs. the SPX, it's quite strong.

 And as I was saying last week, "Something changed with VIX futures", there seems to be real demand holding them together as they refuse to be pushed lower, another broken market manipulation lever. 

Look at Spot VIX today, it's actually up with the SPX and only seeing some EOD monkey Hammering to push the SPX, some small manipulation, but VIX is still green on the day, AGAIN, NOT NORMAL.

Also Professional sentiment is not willing to follow the market any further.

I'll have more shortly, but this is as bad or worse than I expected when I mentioned Leading Indicators earlier today