The NQ8 was relatively weak yesterday, but the rest of the market did pretty well. This smells of rotation to the smaller section of the market (mid/small caps)
XLK/XLC displayed a negative Money Flow (due to AAPL, FB, etc.) while
XLI/ARKK/XBI for example attracted good money
This divergence can also be seen between the NQ100 Futures, which displays a slightly negative LEV pattern, while the S&P500 Futures display a positive LEV pattern. This also points to rotation from extremely overvalued NQ8 stocks to relatively less overvalued equities. This might be the start of the last leg of the current bull market. But this is bullish anyway!
We can note below that the XBI/IBB ratio displays the same pattern as the IWM/SPY ratio: the small caps outperform. Money chases risky assets.
On the treasuries front, we can see that investors are also buying the 10Y.
We can also see a divergence between the decreasing US10Y rates and the increasing German 10Y rates - which are still negative by the way.
This 10Y rates divergence explains the Euro/US$ strength of the past week and also explains why more money is moving into whatever is not the US$. This also includes not only energy based commodities, but also base metals (not shown here.)
Conclusions:
There is a big selling pressure on the US$/Euro due to interest rates trend changes.
This justifies cash being used to buy whatever it can buy.
More monetary inflation is on the way.
