None of the traditional ramping levers are working or even really trying to be employed, SPY Arbitrage is no where near active, in fact the CONTEXT model is running negative which shouldn't be a surprise.
As for our leading indicators, VXX (short term VIX futures) as well as spot VIX are both outperforming their correlation with SPX and this isn't the first day.
TLT and bonds are also outperforming their correlation sending yields from 5 to 30 years leading lower vs the SPX, also not the first day, but they tend to pull equities toward them like a magnet.
Our pro Sentiment indicators are leading negative after moving up for the first tim in a long time with the expected move above the IWM's range (December 12th forecast), so they were leading back then and are leading now, just positive then, negative now.
High Yield Corporate credit is VERY dislocated on a longer term basis with a series of lower highs and lower lows, but it's the near term ramping that it is used for that is of interest and it is leading the market negative. In addition several HY Credit assets are leading the market lower as well today, it doesn't look good in any way.
As mentioned, the $USDX has a negative divegrence so I suspect the USD/JPY will see lower prices as well and likely drag index futures lower with it and Index futures as well as the averages have negative divergences in them, many at the 5 min chart location which I prefer for timing, but they have moved so far out in to longer timeframes, they are screaming red flags for the broad market.
More to follow with charts in the Daily Wrap, but as you know, recently I have been patient in putting out new or add to short positions and today I have been active in posting them, I believe we are not only getting confirmation of the head fake move suspected, but I think we are very close if not at the reversal point as I suspected the Santa Rally would be the bait to draw in more longs and shut the door on them in a bull trap.
5 years ago
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