Market Update

If we don't get a strong move in to the close, which doesn't seem highly likely on an op ex day, then I'd think the divegences built up today were for 1 of 2 reasons; as we have seen before a positive divergence can be used as a consolidation, it's sort of support in a market that otherwise wants to head lower and with the 5/15 min charts negative, the market generally wants to head lower, so it could be used as support to keep the market in a range that is most advantageous to an options expiration pin (causing the most amount of pain in worthless, expired options), or the positive divergences could carry over to Monday, we had a similar situation last Friday when some divergences from Friday carried over to trade on Monday.

Here's what some of the averages look like...

 DIA 1 min continued positive today

 IWM 2 min continued positive

 IWM 15 min, the larger trend is to the downside in near term trade over the next week.

 QQQ 3 min cont. positive today

 QQQ 5 min larger negative trend over the next week

 SPY 1 min positive

5 min positive.

It seems to me that a 5 min positive is too much to just hold an average in place for an options expiration pin, it seems excessive.

As for some of the risk assets...

 Commodities are diverging positively from the SPX in a pretty big way

 HY Credit is also diverging to the upside, this makes me think we are going to see the short term upside whether we see it at the close or Monday.

 HY Corp. Credit is just starting to move a bit near the close away from the SPX.

 TECH ad Financials are close to in line with the SPX, but energy is leading, just like commods.

Sector rotation today, Financials weak, Utilities strong, also Staples in the flight to safety are strong. In the risk group, Basic Materials are building as well as energy. Industrials, Tech and Discretionary are falling off.

I'd be apt to say if there's not a strong closing move up, we see some of this positive divergence take hold Monday.