Additional thoughts

Well my first board meeting was a lo longer than anticipated, what did I get myself in to?

After getting home at 10 p.m. from an incredibly tedious board meeting (these people really do have nothing better to do) and having a late dinner, it only took about 10 minutes of looking around to see the end of day trade was stronger than I previously thought.

Since it's so late, I'm not going to organize these charts as thoroughly as usual, but you'll get the gist of the late day improvement.

First the averages...

 DIA 2 min saw a huge intraday positive divergence starting early, but around the 2:30 break below the SPX's "bearish" continuation triangle (remember bears were expecting the triangle to continue the second leg down today), where I suspect some early bears got trapped shorting the break. The leading positive divergence since then is unmistakably bullish for the near term (next day or so).

 Even the recently weak underlying 3C trade in the IWM saw a big positive divergence, despite the end of day collapse.

 The QQQ's positive divergence just got stronger at the 2:30-ish move below the triangle.

 Here's the actual SPY triangle, since it is symmetrical it is considered a continuation patter, the yellow area is a small head fake, but that is all that was needed. It looks like the early break of regional support was accumulated early to halt the damage.

The SPY intraday chart-that's good confirmation among the 4 major averages.

As for our risk indicators...

 Commodities defied the $USD and rallied with excellent relative strength, GLD and Energy were definitely a big part of this move.

 High Yield Credit is a leading indicator, where credit goes, equities eventually follow, HY Credit was not supportive of the market Friday, today it stayed in the same range as Friday even though equity/SPX prices were lower, this is some support from credit.

 The Euro showed late day strength, meaning the %USD lost some late day ground, giving the market some breathing room, note that the break below the SPX's triangle was a total head fake as they already knew that the $USD arbitrage was bullish for stocks when it broke below the apex. That was thinly veiled!

 And 3C on the Euro showing some accumulation, looks like the Euro should be higher which is good for market risk appetite.

Here's the big shocker, HY Corp. Credit didn't break down today (credit leads), instead it closed green and at the highs of the day in afternoon trade, also as the market staged the head fake move below the triangle.

As for AAPL...

 AAPL is in a support area, both at the trendline and the 50-day ma, which holds no magic other than what traders give it.

 AAPL with a strong 5 min positive divergence, that should be enough to prime AAPL for a move higher.


 Here's GLD vs the Euro (proxy for the dollar), note that gold moved up in to the green today, despite the $USD correlation that would suggest otherwise, since GLD is the primary beneficiary of more QE, which I must at this point mention, Paul Krugman has been everywhere in the last 4 days calling for more QE, I think as I suspected early today, the QE-hopeful crowd seems to have spun the bad economic reports in to good news thinking Bernie has to ease with the economy faltering. I mentioned last week after the F_O_M_C announcement that GLD would be the barometer of QE hopeful sentiment; in their eyes, the weak economic data is QE positive, therefore gold and market positive.

It doesn't matter if the F_E_D actually announces it, they just need their mouthpieces like Krugman to suggest it, then they have plausible deniability. As I said yesterday, the number of F_E_D speakers will give Wall Street what it needs to get the job done.

 TLT-Treasuries, rallied early today because it is a natural flight to safety trade, but look at what happened at the end of day, TLT gave up all of its gains. The flight to safety trade was abandoned.

 Sunday I showed very positive short and long term divergences in the VXX short term SPX volatility index, it seems the short term chart were correct as VXX rallied.

 Here's  the leading positive divergence in the mid term or over the next several days, this accumulation suggests the market takes a dive, but today specifically, there was an intraday negative divergence in to VXX strength, SELL STRENGTH, even if it is only short term.

VXX longer term 15 min chart is very positive, suggesting VXX moves significantly higher, the inverse relationship with the market means the market goes lower, just as we expect, but not before a blow off top rally.

 Sector rotation over the last 2 days shows a few interesting thins, Discretionary in rotation is a risk on signal, Financials are moving out of rotation as we suspected, but they may be so far out that they roll back in for a brief period. Utilities moved as they should being a defensive sector, Energy though was the standout among the 3 pillars (Tech, Financials, Energy) and this with $USD head winds.

 Take a look at Energy's momentum (red) vs the SPX, the $USD correlation can't account for this move, this is where they held the market up today.

 XLE vs the $USD suggests Energy had no business being this strong, it looks like manipulation in Energy to support the market, but I suspect Energy trolls out in the next day or so as Financials and Tech roll in.

 The XLE 15 min chart would seem to agree with recent distribution.

 Financials couldn't get any momentum going until the EOD trade.

 Take a look at today's late day 5 min positive divergence in financials, so far we have the market averages and many industry groups showing strong late day positive divergences.

 Tech tried earlier, but just couldn't get the momentum going.

However the underlying 3C trade shows accumulation intraday in tech, why else would it be there?

As for tonight,

 Based on ES's positive divergences today, I said keep an eye on ES tonight, this far it has recouped all of today's market hour losses.

Remember the positive divergence in the Euro? Since the close look what the Euro has done, this is the risk on currency.

How if Europe can hold up overnight, but even if it can't, I see no reason to throw extra support/$$$ in to the market and not force it to finish it's cycle which should look something like this...

I suspected very strongly we were back on track, but I had no idea so many assets from treasuries, to credit were supportive of further gains in the market and were getting out of the way or in to the game for the move.
I know several of you have sent emails, I want to give them the attention they deserve and it's hard to do this late at night, but I will respond tomorrow when  I can do them justice.

I'm glad to see we almost certainly still have some upside to short in to as this market has seen the ledge break.