With US Stocks and Bonds at all-time highs and volatility at multiyear lows during “the worst” two month stretch for the S&P over the last 30 years, Emerging Stocks, Bonds, Currencies and High Yield Credit have all continued to soar despite the 25% decline in Crude and commensurate collapse in inflation expectations, which is either bullishly divergent or bearishly delusional.

While I respect the former, my money and my call remains on the latter. Recent dollar weakness represents another curious divergence given the string of stronger jobs reports and ongoing central bank easing outside of the US designed to accomplish just the opposite. While the weaker dollar leans inflationary and should support the cross asset resurgence in the developing world, ironically inflation expectations, Crude, Gas and Ag all continue to struggle, which sets up yet another macro divergence which must be respected with EM at the highs.

And if this game weren’t hard enough, as yields have come off post the poor productivity figures, banks have actually rallied (right into resistance) while utilities have sold off. However, I’m not buying the US banks or “Bank Friendly” QE in the US just yet with Gilts at a new low, the 2/10 continuing to flatten and the BKX and XBD into stiff trend line resistance. Europe acts well with the DAX taking out that 2015 downtrend for now, and EURGBP in particular remains in an outstanding technical position which could take it up to .88-.90. Of course the last time EURGBP surged like this was during the ’08 Financial crisis. Similarly, Dollar weakness has the Yen flirting with Brexit highs and a break below 100, which would be bad for Japan and risk assets more broadly if form holds.

So where are we? You are in a world of no yield so you have pushed out to the “Flemish Cap” of the risk spectrum during the stormiest time of the year with stocks and bonds at all-time highs and Bearish positioning in the VIX (Bullish bets) at a 3 year high with Technology leading the market higher. The charts look strong, but the setup is weak. “The waiting is the hardest part.”