LEADING INDICATORS ALL UGLY

This has been a building trend as that's what leading indicators should do in a bounce that has a reversal process. The trend that we've been documenting the last 2 days is worse than ever at this point.

 Our SPX:RUT Ratio which is the companion indicator to the VIX Inversion which gave a buy signal last week for this bounce and has since fallen off sharply as seen last night. The SPX:RUT Ratio is now in its 3rd day of divergence at a new leading low on the 3rd day which is right about where the reversal process/head fake all began.

 HY Corp Credit which has typically been the first lever to be pulled is significantly divergent from the SPX, remember it's not the 3C HYG divergence, that's early warning that only we see, it's HYG's price.

 HYG leading the SPX earlier and now leading to the downside. As seen yesterday, the longer primary trend chart is close to a new primary trend low and much more dislocated than these closer/shorter term charts represent.

 Pro Sentiment which went positive for the first time since May at the lows, has refused to follow the market in to any risk on territory.

The same thing is happening with our confirmation Pro Sentiment Indicator, which is the exact same thing that happened at the last bounce off the 150-day SPX ma that failed.

 Again 30 year yields are leading the market lower at a new low after having supported it very early in the bounce.

And HY Credit once again is divergent at the top just as it was with the SPX bounce off the 150-day that failed.

Intraday, HY Credit looks worse today than it did yesterday, selling off in to today's price action.


I'd say we have pretty slid signals here for a downside pivot of this week's bounce.