Back to Spain?

It seems the main issue effecting the market on that last bit of downward volatility is the EUR/USD, the Euro after bouncing off support at $1.30 has hit a resistance level. Spanish Bond holders are getting nervous about Spain, will Spain ask for a bailout? They have a large amount of debt payments due in October so I suspect we'll know by then, but for now they seem to be loathe to do anything.

The market appears to be discounting some normal-type developments and correlations rather than discounting a flood of QE3 money, it's noticeable in some key areas as well.

 Commodities today have fallen way off, they seem to want nothing to do with the move in equities as we have seen in gold and oil specifically, the two assets conventional QE wisdom would expect to lead the market, especially given stocks' valuations.

 Commodities in anticipation of QE leading stocks and since QE also leading stocks, just to Pre-QE levels.

 Here's the reason for the intraday volatility to the downside, the Euro since the 9:30 a.m. NY open.

 A longer look on an hourly chart shows support at $1.30 and the Euro has run in to some resistance.

 The $AUD is an excellent leading indicator among the currencies, it too is vastly underwhelming vs the SPX.

 Long term there's several large divergences in the $AUD which have been effective at calling tops, the negative divergences are both local and relative to the last top area.

 Here the Euro on a 5 min chart appears to follow the market or rather the market follow the Euro closely.

 Again, today's break in the Euro causing the move up to stumble, but why is the market paying attention to legacy arbitrage relations if the only thing that matterss QE liquidity?

 I've been watching High Yield Corp. Credit to see if it will give a sign, thus far it is not leading or lagging.

 Intraday it is lagging, this may be the start of something or just some noise, but once again it seems like the market is paying attention to things like currencies and credit.

 High Yield Junk Credit is showing a similar divergence today.

 Yields have followed the market lower, they don't look fond of following it higher here, these also has some predictive value at divergences.


 Speaking of which, on a 15 min bigger view of Yields, we have a large divergence.

 The 3 main groups needed to sustain a rally are Energy, Financials and Tech., this is Energy today.

 And Financials

 Finally Tech which was leading yesterday, the SPX and Tech seem to have met at the mean.

You can see some of this sector movement above as this chart shows today and yesterday as of noon, Financials are definitely falling off later in the day, Energy has been off all day, Tech is vacillating, the high Beta Materials stocks are doing pretty well as are Industrials, interestingly the defensive Staples and Healthcare are also doing well.