Leading Indicators

I've seen enough that I feel reasonably justified in calling out short trades in the area after looking at the averages, the futures, t=he levers and now Leading Indicators which I'll make brief.

VXX is outperforming the SPX today, there's a clear bid under protection if VIX futures as someone is certainly concerned about downside as you saw from the long term 60 min VIX futures charts along with shorter term.

VIX is performing in similar manner.

HYG was in line intraday until 12:30 when it started lagging the SPX quite badly.

As for some HYG charts you need to see...

 While HYG may be supportive intraday, on the bounce for this week, don't be fooled, it is still very disconnected and overall negative, not enough support in HYG, smart money pulling the levers will not commit that much to HYG as a failure would cost them a lot, just enough to support the market.

 Of course on a longer term trend since October lows, HYG is SCREAMING SELL as it is severely dislocated from SPX.

Other HY Credit is also selling off, this type is not used as a market lever and thus is more "Honest".

If smart money believed in this "bounce", why are they selling risk assets like the plague?

Here's PIMCO's High Yield Fund, it saw selling in to the fall before Monday and again now.

Pro sentiment (both indicators) are selling off, so pros aren't buying this either, exactly what we expected and wanted when I said this bounce was a , "Gift Horse".

 Pro sentiment vs SPX selling off.

I still think that even though the correlation between commodities and the SPX is nothing like it was in QE 1, this severe divegrence is important and at least shows the market believes global growth is in big trouble.

And Yields which have been supportive as a relflex from lower TLT prices as a market lever are now moving down as TLT and bond futures are gearing up to end their lever/market support and move back to the Flight to Safety Trade.

I'm actually amazed there's this big of a divergence in yields vs the SPX today all things considered as they were supportive yesterday. Remember , yields move opposite treasuries and they are like a magnet pulling equity prices toward them, here DOWN.

Now for some assets...