The Week Ahead

This is a bit of a tough one for a couple of reasons. First as for GLD, I see it moving lower, continuing the pullback it has been giving strong signals for. As for crude, it looks to have a solid bounce in front of it.

As for the averages, if we can say, "There's relative strength" in an environment that's largely very weak, then it would be in the SPX this week rather than the Russell 2000, but there appears to be significant weakness.

The Leading Indicators have a few hold outs, one HY Credit asset is leading negative, one is still positive, HYG is in line, but has shown severe deterioration this week so I'm getting the feeling that we are still not done, perhaps there's some fussing around the SPX 100-day and 200-day moving averages, but on the whole, the Index futures look quite negative, nearly a full house of negative divergences.

It's Treasuries that are throwing me. The longer end looks like it will come down this week and the shorter end rally, however, that may be because the charts are not yet reflecting the most recent news. It would suggest that bond traders are pricing an interest rate hike out further in to the future, but I'm not so sure and I'm not so sure that the assumptions that have been acted on, showing up on Treasuries' 3C charts, aren't in the middle of a possible change as new information comes to light.

This is where I'm struggling with understanding the market, bonds, but as of now, it looks like 2 year will rally, 5 year will see some weakness and the further out , the more negative they look, for example TLT looks like it's on the verge of a sharp decline, but again, this data has been there and I'm not sure if a couple of days since the F_O_M_C is enough time to reflect a change in attitudes, but it's something I'm going to be looking at very closely.

Except for the SPY, it looks like weakness Monday on the cash open, in fact it looks like weakness most of the week. I'll try to get more specific in a follow up.