Leading Indicators

This is more or less the same as yesterday, these aren't screaming signals, but several are positive enough to be worth capturing and positing.

Again, it doesn't matter to me if we get a dead cat bounce and if USD/JPY take out $102 on the upside, the market is likely to move in a way that looks like a dead cat bounce, that's still higher prices, it's still shortable.

If USD/JPY needs one more shot at $102 before trying to break through, so be it. That's what we have in front of us immediately.

If there's a failure at $102 or there's just too much selling and sends USD/JPY back down, then it's back to whether this market can put in a reversal process with enough gas in the tank to make a bounce. The bottom line is this market looks like "Horse manure" and any chance to short in to higher prices (with a good set up of course) is a gift.

 HYG as a lever to manipulate the market , I mentioned a positive dislocation leading the SPX yesterday, today it's much more clear.

High Yield Credit, this is interesting because it looks like they were willing to buy at the lows this a.m., but not willing to go any further. I can't divine what the thinking is, but I'd suspect it means it's a speculative/small position because they expect any upside to be short lived and want to have a position small enough that they can get out of the way quickly when the time comes.

As far as sentiment (pro), the first of out indicators looked better yesterday, it added some today, so again the feeling I get is the same as described above.

Our second sentiment (pro) leading indicator has the same kind of look, willing to sniff around at the lows, but not much after that.

 VXX vs SPX (with SPX prices inverted to show the correlation), there's a little underperformance in VXX, not the monkey hammering we saw Monday.

Yields are one of my favorite leading indicators and interesting here because they are negatively dislocated, I'd really like to know what they'll look like tomorrow, if they continue heading lower, they will act like a magnet on equity prices and pull them lower to reversion to the mean with yields.