The averages themselves were all over the place with the Dow-30 leading at +0.35%, the NDX with a gain of +0.01% which is as close as you can get to flat and still color the candle green and the market leading Russell 2000 at a loss of 0-0.44%, the biggest move of the day in the major averages.
The big mover today and this week (on track for the best week in 9 months and just shy of 1-year highs), the $USD...
I warned about the F_E_D inspired knee jerk reaction as I always do and we got it just after an initial drop in stocks as the VIX was hammered lower, the market knee jerked higher, although I showed you the distribution and TICK index in to the move, thus it's easy to see why these knee jerk moves are almost always wrong and faded which started to happen in to the close.
High Yield Credit wasn't buying the knee jerk, there's smarter money at work in the credit markets.
Speaking of Credit, you've heard me say that HYG has been leading the market since the base started forming for this bounce on 8/1, I probably showed it a few times as well as I have shown the deterioration in HYG. Today was the end of the leading for HYG.
As the minutes were released a lot of assets moved, the $USD popped significantly higher, around 1% now on the week, Treasury Yields popped 3-4 basis points higher as T's fell, but that story looks like it may just be getting started as TLT put in a positive divegrence (shown earlier today after the minutes), HY credit seen above hit the worst levels of the day, Crude (WTI) jumped 1%, gold fell modestly, but don't forget about this post...GDX , NUGT & GLD Charts. And interestingly as we have been watching for several days, one of the most important metrics of the bounce...
There was no single Dominant P/V relationship, the Dow saw Close Up/Volume Down with 15 stocks, this is the most bearish of the 4 relationships, the NDX saw the same with 42 stocks, the R2K was mixed with Close Down/Volume Down and Close Down/Volume up, the latter may create a 1-day oversold condition, although it wasn't dominant (co-cominant).
6 of 9 S&P sectors closed green with Industrials leading as you might have guessed and 133 of 239 Morningstar Industry/Sub-Industry groups closed green.
Today for the first time in a week or so, Pro Sentiment was down.
As for market breadth, there was virtually NO CHANGE from yesterday either way.
I suspect we'll see the Knee jerk dust settle and I don't think the end result will be a pretty one. I think the performance of the averages today even with the knee jerk (and the Russell dislocated from the pack) show we are running out of gas.
The very short term intraday indicators may reset a bit, but the 5-15 mi charts should start showing some real acceleration in divergences, along the lines of intraday trends for the week...
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