SIMILAR TO LAST WEEK

Last week we saw a number of 3C divergences that did not turn the market, however they seemed to cumulatively build nonetheless. The reason they didn't turn the market is because the correlation between the markets and the dollar are what is and has been moving the markets for some time. My interpretation is that these negative divergences did most probably show distribution into a rising market, rising because of the bounce in the Euro. Here's the FX chart.

To the left you can see where the Euro gapped up on the news of the Ireland deal, it ran for a bit and then gave up all of it's gains. The second arrow shows the Euro bouncing within the downtrend at 1 p.m. today and you can see where it closed.

 Looking at the charts of any of the major averages, they also bounced at the exact same time and closed similarly.

The negative divergences seen suggest to me that this bounce opportunity was being used to distribute positions into higher prices as the market's move now with the FX market. We saw this last week as well, although each divergence that didn't turn the market seemed to cumulate in longer charts.

There has been suggestions that the NY Fed didn't want a red close, if that is the case, then I'd think any manipulation was done through the FX markets and not the equities market, but more likely in my opinion is the FX markets saw a simple, regular bounce and the US market's being so highly correlated to them, simply followed.

If the FX markets were down during the same period, from 1 p.m. through the close, then I would be more inclined to believe that the NY Fed was manipulating the markets as they had done before QE2 POMO started.

As of now, I believe the steady and fast flowing fundamental news from across the world that is coming in at breakneck speed will have the most influence over the FX and equities market.