Today's market action

I showed you several 1 and 2 min charts in which positive divergences were trying to lift the market, but negative sentiment had just been too strong, that is until late in the day when the Euro/$USD finally started losing downside momentum and allowing the market a break to lift it in to the close.

 Here's where the Euro finally let up enough to let the positive divergence that HFT/market makers, etc had been working on all day finally move the market.

Here's the regular hours ES positive divergence, it is going slightly negative in AH.

 Interestingly, they were able to lift the market right to the VWAP which is a tool institutions use to go short or buy long, they wouldn't want to go short earlier with the market down that much, but at the VWAP it would be a better entry, as you an see ES volume was very heavy yet ES could not move through the VWAP, suggesting that institutional clients probably were going short at the VWAP, that's the reason with all that volume ES couldn't break north of the VWAP (Volume Weighted Average Price.) Es is relatively flat in AH tonight.


The above chart makes sense as ES which was reacting quite emotionally and fearfully was selling below the risk model/Context, but now the two are converging loser to fair value.

I think my original thoughts about today were correct, seeing the SPY volume spikes and attempts to move higher on a positive divergence, but there seemed to be an emotional, fearful component that kept the market down most of the day, at least until the Euro's downside let up enough for the market to move up in to the VWAP.

I don't know whether they can fill the gap or not, but it does seem like a change of character is underway and the dislocations that we have seen between risk/credit assets and the market's joy ride north of those risk benchmarks is about to converge with a move (probably sharp) down in the market this week.