I checked leading indicators real quick, again no smoking guns, although I applaud several of you who wrote in over the last hour regarding the spike in the 5 year treasury yield, a leading indicator we have had a lot of success following, however in this case, the reason is the Treasury, for whatever reasons, scheduled an auction of 5 year bonds at 1 p.m., it didn't go so well so that's the reason the 5 year yield spiked.
The bigger, more important picture may be the 30 year.
the 30 year yield vs the SPX has won every time there has been a divergence between the SPX (green) and the yield (blue), note the large divegrence now, we saw these at the July decline as well as the Chimney from the August cycle, although no where near as big, they all led to lower SPX prices.
VIX is outperforming the SPX (SPX prices in green are inverted to show the normal correlation).
The same is true of VXX which we already know was seeing demand today and over a larger period recently on stronger charts.
HYG has been leading the market lower intraday, remember distribution yesterday, it looked like it would support a bounce pre-F_O_M_C, perhaps this is a pre-planned knee jerk...
HYG on a longer basis of course is still in a deep leading negative position and as far as the historical leading of HYG...
Here it is and worse than ever.
I'm going to be watching the market very closely during the F_O_M_C so I might be a bit quiet, but anything I catch I'll have out to you right away.
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