Since 2006, similar divergences have typically preceded weakness over the following 3 months

1. FOMC minutes. "FOMC meeting minutes score as the most hawkish since July 2023. A majority saw a rate hike if inflation remained hot, while many preferred removing the easing bias from the statement (three official voters, but the minutes suggest most non-voters agreed with them)."

2. VIX vs. SPX. "The collapse in skew over the past 6 weeks has created conditions for a less reactive $VIX relative to changes in $SPX, pushing spot/vol beta to a 12-month low."

3. Sector ETF flows. Since the March 30th low in the S&P 500, Tech ETFs have seen over $20bn in cumulative inflows. The rest of the sectors have seen a combined outflow of $334m.

4. SPX vs. RSPD/RSPS. On Monday, the drawdown in RSPD/RSPS (EW Discretionary/EW Staples) exceeded 15% while the broader index traded just off its highs. Since 2006, similar divergences have typically preceded weakness over the following 3 months.

5. Global earnings revisions. "Earnings leadership remains firmly US-centric: EPS revision ratios across Nasdaq (~2.5), S&P 500 (~1.8), S&P 400 (~1.5) and S&P 600 (~1.3) all sit above global peers."

ICYMI