Market Update

Several of the averages are showing some early and fairly decent intraday positive divergences, what is also interesting is none of the averages show a negative divergence on even the fastest timeframes as the market gained downside momentum yesterday around 1:30 which is also around the time that news broke that CDS would not protect Spanish bond holders from being subordinated by the EU bank bailout loan, the implication being that smart money didn't have time to sell intraday positions as the news was not discounted and moved the market quickly.

 DIA 1 min, the red box is where we'd expect to see a negative divergence in to the afternoon decline, it's also the same time the ISDA made their determination that CDS would not be triggered in the case of Spanish bond holder subordination to the senior EU loan through the ESM. We also see a leading positive divergence in the DIA starting this a.m.

 The 2 min DIA chart confirms the same.

 As does the 3 min chart.

 The IWM shows the same thing as the DIA, both yesterday and this morning.

 The IWM 2 min chart isn't as strong as the DIA as of yet.


 The QQQ 1 min chart also confirms the DIA chart findings with no negative at 1:30 yesterday and a leading positive this a.m.

 Again the 2 min chart isn't quite as strong as the DIA as of yet.

 There's some action on the 3 min, not huge, but maybe the start of something.

 The SPY has a relative positive, but it is by far the weakest in underlying trade this a.m., although yesterday's findings are the same here.

Not much to see on the 2 min chart yet either.