Leading Indicators

Leading Indicators are finally taking on a more decisive change in character, certain of these indicators have been pretty much in place as we'd look out for as far as signals go while others were holding out, I stress this is all very near term, almost intraday or day to day action. As mentioned earlier, the longer term are right ion line with expectations derived from market breadth, longer term 3C charts, mass psychology, etc.

 Today our VIX Term Structure custom indicator gave a very small buy signal at the lows of intraday a.m. price action, you can see it at the white arrow....

 As far as the signals of this indicator on a 60 min chart, today's didn't even show up and I post this just to give you an idea of how big each signal was in the past and how much it moved the market, obviously, generally speaking the larger the signal, the more it can move the market. The last two signals were each at the two January bases, that now appear to show both as having failed, they are the last two visible to the far right so today's intraday is nothing very serious,  but while I'm not drawing any conclusions as of yet, it would be consistent with the Crazy Ivan shakeout described earlier today around the apex of the descending triangle which is coming to a point so very small moves up or down would move above or below that triangle giving technical traders buy/sell signals. I'm not saying this is the theory I've arrived at, just that the size of the signal is consistent with that potential theory.

 VXX vs SPX intraday with SPX price inverted so you can see the normal correlation and the later in the day out-performance of Short Term VIX Futures.

The very short term intraday VXX 3C charts (1-3 minutes) look like a pullback in VXX, which again would be consistent with a Crazy Ivan shakeout to the upside first (even though a quick dip below would set up a small bear trap giving an upside move better momentum), then as the VXX intermediate (5 min and longer) to long term charts are quite positive, it would also be in line with a Crazy Ivan shakeout above the apex and then below, the stronger move being the one below.

 This is HYG intraday underperforming the SPX, yet again, the 3C charts show something a little different very near term...

 As posted last week, HYG is seeing larger negative signals suggesting they are moving out of the asset which is commonly used as a ramping lever to ramp the market, this 5 min chart is one of several posted last week showing solid deterioration in HYG and a likely large move to the downside to follow shortly, the market averages tend to follow HY Credit.

However once again in the very near term, confirming the VXX 1 min chart...

There's a small 1 min HYG positive divegrence, suggesting it is getting ready for a short term move that would lift the market to the upside, our potential Crazy Ivan move, first shaking out to the upside, followed by a downside move (potentially a downside move below the range first before the first upside gets started as a primer for momentum).

VXX is in line with this both short term on the 1 min charts and longer term on the 5 min + charts.

 Meanwhile HY Credit is putting in a more clearly negative set of signals and trend. You can see where its lack of confirmation sent the SPX lower.

This is a much clearer trend than we have seen which is one of several indicators we have been waiting on.

 Pro sentiment with our first of 2 indicators is inline on the downside, these have been either supportive or even positive, causing us to wait on the signals, they seem to be changing character.

This is a longer term view, while not screaming a negative signal, the character is moving more and more negative.

All of the leading divergences it has called are highlighted.

 The same with our second sentiment indicator, note today's particular weakness, we are looking for these to contradict price , them being negative with positive price, that's our signal.

 And the trend is taking on a more negative tone as well

5 year Yields have led the market, they are a bit negative, so maybe we get a quick downside Crazy Ivan dip/bear trap to set up the upside shakeout.

 10 year yields not confirming and dragging the SPX lower to the left, a bit weaker on the right now.

And the same for 30 year yields.

The big picture in this cycle since the October lows/base shows horrible deterioration in yields which tend to pull the market like a magnet toward them, this is the bigger picture, I didn't want to draw on this chart so it would sink in.