Direxion Daily S&P 500 Bull 3X Shares (SPXL)

[tw0122]

Warning: This Market Rig is Going to End Terribly

This is getting old.

The PPT is now juicing Oil higher, because doing so relieves stress in the junk bond market (a large percentage of junk bond issuers are shale companies that require higher Oil prices to be profitable).

This, in turn, is sending a “all clear” signal to stocks, inducing algos to buy indiscriminately.

Put simply, the formula for this market rig is:

Buy Oil futures, because it will drive Junk Bonds higher, and stocks will follow.

You can see the rig right here in plain sight… Oil (black line) pulling Junk Bonds higher (blue line) almost tick for tick.

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Critical market internals suggest this rig is now coming to an end. Two major market leaders (Goldman Sachs and the Semiconductor index) have not only been lagging on this latest bounce, but both were DOWN yesterday despite stocks rising 1%.

GPC110192.