Quick Market Update

SPY 5 min chart with the gap from last Friday.

When we have intraday positive divergences  like we have now (typically the 1-3 and sometimes 5 min charts), we generally see corrections, that would be the best word for it. A correction can be through price or through time, price meaning a correction in price to the upside, most likely contained to the gap, or through time meaning a lateral consolidation. The short term intraday positive divergences that appeared later Friday have kept the market from falling and have thus far consolidated through time in a lateral motion.

There are still strong enough 1,2 3 (and even a 5 min here or there) min. divergences to move us in to the gap. The SPY/DIA look the best in this regard. The QQQ/IWM look the worst, perhaps that's why I favored the AAPL Puts today.

There's some deterioration in the strongest (SPY/DIA), but not enough that I would say this short term divergence episode is over. I don't mind the AAPL Put position because the episode looks more like noise than anything serious and the most visible divergence is still on the 15 min chart and even 30-60 min charts for a decent size pullback or "correction".

I'd like to take a look at the Euro, Dollar and the Risk Asset Layout before the close and of course AA to see if there are any interesting changes.