High Yield Credit which has also been leading the market via selling off vs the SPX for weeks, also closed with a leading positive component and this IS NOT the same lever manipulation HYG sees.
SOMETHING IS STILL GOING ON AS WE EXPECTED.
Interestingly our Professional Sentiment indicators that were acting apathetic earlier today, showed for the first time in a long time some near term strength, again along the lines of market and specifically IWM expectations.
Of the 238 Morning star Industry/Sub-industry groups, 62 of 238 were green on the day.
Interestingly I looked at both the S&P sector and the Morningstar groups on a multi-day basis. On a 5-day basis, NINE OF NINE S&P groups are RED with Utilities leading at -2.13 and Materials lagging at -5.95%. For the same period of the 238 MS groups, ONLY 5 OF 238 WERE GREEN OVER 5-DAYS!
Over a 10-day period (2 trading weeks) AHGAIN OF THE 9 S&P GROUPS, NINE OF NINE groups are RED with Utilities outperforming at a loss of -1.98% and Energy lagging at -8.35%.
Over the same 10-days, only 14 of 238 Morningstar groups were GREEN!
On a 21-day basis, only 2 of 9 S&P sectors were green , again with the defensive utilities leading at +1.20 and Energy lagging at -13.92%.
Over the same 21-day period, only 67 of 238 MS groups were green. Interestingly besides the very ugly theme across timeframes, the defensive Utilities were leading so that's your recent trend.
Quickly , breadth continues to decay. Of the NYSE Stocks, only 26.86% are above their 40-day moving average (DOWN FROM 70% on November 26th, the last defense day of the market before Black Friday), while only 38% are above their 200-day moving average.
WHILE IT IS EXCEPTIONALLY CLEAR THAT THE PREVAILING TREND IS VERY NEGATIVE IN UNDERLYING TRADE, BREADTH AND LEADING INDICATORS, THE EXAMPLE THESIS OF WHAT I EXPECT IN THE RUSSELL 2000 LOOKS LIKE IT'S VERY MUCH STILL ON TRACK.
The market is still as broken as ever or rather much more so, but this head fake move is just a representation of that , although like many events where price is concerned, it may not seem that way at first, but book mark this post, such a Crazy Ivan RUT head fake move will lead to an even sharped downside move than last week's horrid performance , allowing us to add to short positions at better prices and much less risk with the best timing signal we have conceptually...THE HEAD FAKE MOVE, RIPE IN THE RUSSELL 2000/IWM.
The SPY, QQQ and IWM's closing 3C divergence portrays additional weakness tomorrow morning, but the divergences needed for our head fake move are still in place. I would suspect we'll probably see it sooner than later, in fact tomorrow's F_O_M_C looks like the most logical place as the Knee Jerk reaction would be a perfect place, perfect ignition and perfect cover for such a move. Remember that F_E_D events almost ALWAYS see a knee jerk reaction and it is almost ALWAYS wrong, so this would fit perfectly at the 2 p.m. policy announcement and the press conference following.
As for futures, gold looks like it will see some overnight gains, perhaps in to tomorrow.
All 1 min Index Futures are leading positive in to the overnight session and as expected, at least one of the Index futures has already seen the 5 min chart go positive, guess which? The IWM!
The 7 min charts remain positive so I think we are now on track with the remaining Index Futures to see their 5 min charts go positive in the overnight session as the 1 min. are positive and as I said, the Russell 2000's already went positive t0day as it was not earlier.
Tomorrow looks to be the day, it will be a busy one for us!
I'll update futures if I see anything standing out.
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