Leading Indicators Mixed Bag...

As Europe is closing very ugly, I thought I'd peak at Leading Indicators quickly. I usually don't like looking at Leading Indicators this early in the day, but there's an exception based on what they started to do last week.

As far as VIX short term futures, VIX, HYG (the price vs SPX, not the 3C 1 min divegrence), and TLT, they are all in line nearly perfectly with the SPX intraday, no leading strength, no leading weakness.

TLT/bonds being generally in line has resulted in yields which are a great leading indicator, also in line today, for example the 5 year and 30 year vs the SPX...

 5 year yields nearly perfectly in line with the SPX which doesn't give us any hint of an advantage one way or the other just like the VIX/VXX/TLT/HYG relative price performance vs SPX.

The same is true of the 30 year yields/

My custom SPX:RUT Ratio is positive and not confirming price at these levels.

Also as noted last week, pro sentiment has been running to the upside near term as an additional indication of late last week's apparent base formation attempt for an oversold (1-day) bounce.


Credit (HY) is also showing some interesting things as well.

 HY Credit vs the SPX first leading it lower, but now in a small positive dislocation/divergence vs SPX (green).

HY Junk Credit is doing the same

as is PIMCO's HY Fund.

Again, if we bounce it's an opportunity, if we don't then shorts keep working, although they haven't even scratched the surface of the move to the downside envisioned in the 12/12 forecast as they haven't moved below the bull trap trigger area yet, at least not in SPX. Despite Europe's ugly close, I suspect there's still a good chance of a small bounce in the market which again, I'd use as an opportunity, but I would not (personally) try to trade any such bounce as the probabilities are just stacked way too high in the other direction.