Leading Indicators

Taking a quick look at Leading Indicators, it seems the market hardly notices tomorrow is "The most important F_O_M_C meeting ever", as each one is.

There's not a lot of movement or indications standing out like a sore thumb, however there are a few that we have anticipated a bit that have moved in the anticipated direction, specifically HYG / High Yield Corp. Credit which has been holding above the SPX, which is one of the smaller bits of evidence for a bounce early this week which has largely been contained to the one asset we picked to go long Friday, the IWM, of course I closed that out this morning for a 2-day 70% gain and just recently entered a fade trade (IWM puts), I see some evidence for those working in the Most Shorted Index as it seems to be firmly in control of the market today.

As for HYG, it had been slightly leading which is why I also anticipated we'd get some bounces in some assets that would set up, trades that come to us like NFLX which is one we expected a bounce, apparently up on news or an upgrade. AAPL, IYT, PCLN, etc.

Here are the charts...

 The SPX (green) is meeting up with a declining HYG which is not surprising on either count (one being we anticipated a pre-F_O_M_C bounce), remember HYG had been showing and still is, underlying deterioration, so the two have almost reverted back to the mean.

However I am interested in the broader credit market and how it's reacting, I'll have to wait to get IG and some other HY until after the close, but High Yield Credit below...

 Is clearly deteriorating intraday today, not buying in to the bounce.

Sentiment indicators are mixed so I'm ignoring those.

Yields are pretty much in line with the SPX so there's no leading indication there (that's the default relationship, it's when Yields diverge from the SPX that we get a leading indication).

 Yesterday we saw significant outperformance in the VIX, it is outperforming today as well, but that's a function of yesterday's gains, I inverted SPX's price so you can see what the natural correlation would look like (usually move exactly together).

I was considering getting long some volatility pre-F_O_M_C, I don't see the signals supporting the trade, although fundamentally it makes sense, so I'll wait on that, see if anything pops up tomorrow (likely after 12 p.m. when the F_O_M_C has been leaked by a network with the information on embargo).

Finally... the Most Shorted Index which appears to have led the market all day.

The MSI in red clearly led the market today, however as short squeezes go, this one looks like it was spent this morning on the initial squeeze.

I'm going to look at futures, currencies, Volatility and some more individual assets/trade ideas.