Market Update

Earlier I was a bit concerned with the market's ability to bounce, we have 1 solid day in, but I was expecting more. I'm starting to wonder if the earlier 3C weakness was due to the market rotting sectors. As you know from yesterday, I said Technology is well in to rotation, it should start to decline and Financials which have been out of rotation perhaps are about ready to roll in to rotation.

Just take a look at AAPL's chart.

This was an exceptionally strong chart until today.

Looking at Tech vs Financials...

 Here's the 15 min XLF hart, note how strong the leading positive divergence is.

 Here's the same on a 5 min chart.

Meanwhile, XLK isn't doing much. It seems earlier we may have been caught in a transition from declining tech rotation to an improved Financial stance, but financials (although looking strong in 3C) haven't made their move yet, leaving a temporary void. If financials are going to take over, then we can expect some more upside on the bounce and the strength in the Q's today would likely be replaced by strength in the SPY tomorrow.

 At the top, technology is fading in the early afternoon, at the bottom, Financials are seemingly coming up from the depths of a sector that has been out of rotation. The 3C charts implied good strength in financials, but this isn't a 3C based sector analysis, it's based on price movement and until financials make their move, the sector won't show rotation.

 Here's some weakness in the QQQ

 And the 5 min chart shows more.

The SPY however looks like it will test the day's highs, if financials kick in before we hit that resistance level, the SPY may blow right through that resistance.

This is what I believe we were seeing earlier, some temporary weakness based on sector rotation happening virtually right now.