Market Update-gap fill

The market makers/specialists had to work quick this morning as the move in the Euro/USD wasn't likely to hold long.

 The DIA which in the last post I said looked the weakest in 3C also has been the laggard in trying to fill the gap. The DIA is now moving to a leading negative short term position.

 Note the white arrow (positive divergence) in the IWM followed by confirmation and a building negative divergence as it nears the gap area.

 The Q's also are going negative at a gap fill.

 XLE benefitted from the FX arbitrage correlation with the early Euro bounce which only slightly weakened the $USD intraday thus far, but I suspect this large industry group which all of the averages have exposure to is now putting pressure on the major averages and will continue to do so with a decline in the EUR/USD.

 Oil specifically saw a short lived bounce which was sold in to as it seems pretty obvious the Euro bounce wouldn't last too long, at least they weren't willing to bet on it. USO is leading negative now.

 Here you can see Energy (green) vs. the Euro and how the Euro falling off caused distribution in XLE to pick up.

XLK/Technology has seen a minor intraday positive divergence and has remained in line, this is the reason for the Q's outperforming the other averages, we will see if 3C moves to a leading negative position as Technology doesn't have nearly the same level of sensitivity/correlation to the Euro as Energy does.

XLF /Financials isn't doing much right now in underlying trade, but I will remind you of the sector rotation seen last week with Financials moving out of rotation, causing a very strong long term divergence and very positive in FAZ, the Financial 3x leveraged short or inverse ETF.

FAZ 30 min relative and then leading positive divergence.

BAC remains one of my favorite short term trades, I prefer using Puts for leverage and the trades have all been very short term. Right now I wouldn't call BAC a low risk set up for that strategy, but we will see if a catalyst can give us a better entry, perhaps the EU summit?