I'll just post the daily chart of SPY (cash) versus HYG - the Corporate High Yield Bond fund, and pretty much let it speak for itself.
The recent data is one of the larger divergences we've seen in a while, and one can note how it 'generally' has been tracking the index. So maybe what we are getting now is a 'leading' indicator of the risk appetite of the smartest money - and we'll see this week whether the huge divergence gets repaired (and HYG rises), or whether it is acting as a valid warning for SPY to begin at least a retrace sometime this week to react to account for the potential mood change among the whales.
Market technical oscillators (such as MACD, slow stochastic, etc.) tend to be a bit lagging. This is a search to find a slightly better true 'leading' signal; meaning that - to be useful - its turn should come slightly before that of the equity market without being too premature.
Have an excellent rest of the weekend.
TraderJoe
In the last post I understood your reason for drawing the trend line the way you did, namely lack of a clear reversal signal. Nonetheless, another trend line can be drawn, with many more touches, that could indicate a break and back-test.
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