Leading Indicators

I hope you got a chance to see the last post and specifically the SPY Arbitrage and ES/CONTEXT Model as they or at least the SPY Arbitrage was EXACTLY as predicted earlier this morning without having had the benefit of looking at it, just based on what we already know and expect.

Leading Indicators, which are 1 of 3 very important indications for calling a pivot/top area (for the move called in the April 2nd forecast) where we want to open larger positions for the next leg before it actually starts and makers its turn, as this has been demonstrated numerous times to be the best entry with the lowest risk and highest timing probabilities, posted short term positive divergences yesterday in line with our very short term forecast for today which was the market bounce off yesterday's support as defined by numerous indicators, but visibly most easily observed, by the bullish Hammer candlestick reversals yesterday (which were weak in their own right overall, but enough for a green close today).

If you saw the charts posted yesterday for Leading Indicators or as they have been posted through this entire process, then today's move would be no surprise as they too were forecasting a very near term pop to the upside today, HOWEVER, they have deteriorated substantially since the April 2nd forecast followed up and started the very next trading day (A Monday after the 3-day Good Friday weekend holiday).

As shown last night, the important longer term view of these indicators since the market started to fulfill our April 2nd forecast the very next trading day which was April 7th, have deteriorated significantly.

Intraday today Leading Indicators were supportive as they were forecasting yesterday, but there has been deterioration in to today and more importantly on the larger view April 2nd trend basis/

Of particular note today is the SPY Arbitrage which tells us the market strength simply is not there without resorting to tricks to manipulate short term trade in the market.

Yields were trying to be supportive intraday, but overall lost more ground for our larger L.I. trend.

Pro sentiment was helpful around the 12:30 ramp as seen in SPX, but has deteriorated both longer term and intraday today significantly.

Commodities were also helpful to supporting the market intraday today as predicted yesterday, but again larger view in a bad place for the market.

Perhaps most notable is High Yield Credit which deteriorated on the day and within the longer term indication that means the most.

I'll update these in the Daily Wrap.