ES from yesterday's close and the big move just before midnight EDT as the ESM debt seniority issue was announced as being removed from the ESM treaty. This is a big deal, this is exactly what sent the markets down when the EU approved a $100 bn Spanish banking bailout, they expected the market to cheer, instead it flopped because of the ESM's debt seniority, which would make all Spanish debt holders secondary to the ESM, thus Spanish rates rose to levels above 7% on their 10-year debt.
In the white box, what first appeared to be a 1 min intraday divergence, as I showed you yesterday, was much bigger- effecting much longer timeframes, suggesting HEAVY institutional involvement in a very short period of time.
ES and the European open at the green arrow, the US open at the yellow arrow, we have a slight relative negative divergence intraday.
The EUR/USD pair from yesterday's 4 p.m. market close (red), the Euro broke above the level I consider to be short squeeze territory.
Lets not kid ourselves, nothing is fixed in the EU, nothing will be fixed, this is another announcement that has no meat behind it, but we weren't looking for a Primary trend change, we were looking for a short squeeze that we could ride and then short in to for the next primary trend leg down.
Market updates out next
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