Market Update

ADP came out with an astonisshing print in employment gains, watching the ADP numbers for some time now as they started emailing them to me several years ago, my opinion of them is not too high. In any case, the number was very strong and the market bounced off the gap lower on the open. ISM came out strong, but the key was the employment index which droped, completely contradicting the ADP gain. To me it looks like institutional money is riding the headline as retail doesn't tend to look too far bayond the headline  and they seem to be distributing into retail's chase of the headline numbers. Had they read what's inside the ISM report, they'd see that the ADP number is completely at odds with ISM. There were some interesting trends in ISM that confirm a few of the 2011 themes I've been looking at-more on that later. Here's the SPY.

 The strongest 3C reading today thus far was off the gap lower, since the 1 minute chart has shown distribution into higher prices as retail interprets ADP and ISM as both positives, while institutional money must be thinking ahead to Friday and the employment numbers with such a huge disparity between the two reports and ADPs not so accurate track record with last month seeing a huge miss by ADP's forecast.

The 5 minute 3C chart is showing the same negative divergence, specifically into the second intraday wave higher.