"About 40% of the top 100 stocks are trading with inverted call skew"

1. HY Advance-Decline Line. "We don't need to go all the way back to the GFC to notice that this kind of divergence can be a harbinger of bad times for equity markets."

2. Hedging demand. "Sentiment in the equity market remains remarkably constructive despite sharply rising bond yields ... SPX 1M skew is trading in the 5th percentile low currently as investors rotate out of hedges and into upside calls. And it's not just at the index level - about 40% of the top 100 stocks are trading with inverted call skew (a sign of extreme bullishness)."

3. Pensions vs. US equities. "US Pensions are modeled to SELL $33bn of US equities. $33bn to sell ranks in the 97th percentile amongst all buy and sell estimates in absolute dollar value over the past three years. 33bn ranks in the 98th percentile going back to Jan 2000."

4. Highs vs. lows. Last week, "21 of the 28 net new lows came from Utilities, Staples, and Real Estate ... So yes, breadth stinks. But where it stinks matters. Or, as our friend Larry Thompson recently put it best: If breadth is bad, don't own breadth!"

5. SPX vs. midterms. "Over the last 90 years, the S&P 500 has produced an average return of 17% in the 12 months following midterm elections."

ICYMI