Early Trade

It seems even the European markets didn't stay exuberant about the Spanish 2013 budget for long.

The European Top 100 after gaining ground yesterday lost ground today.

The main event in Europe today is the Spanish banking sector bottom up review results to be released at 12 pm EDT today with an expected $60bn shortfall in the banking sector, this could be a market moving event and I suspect the market will not move too much until this data is released.

Carrying on from last night's theme of highest probabilities for today and thus the future viability of a bounce, here's a look at what I showed you last night as of this morning.

 Yesterday we saw selling in to the move higher, this is why I closed half of the URXY (Russell 2000 3x leveraged long ETF) yesterday on this signal. Thus far we have an open that is more or less in line, for the bounce to be sustainable and for there to be some opportunities to play it today with some long positions, this 1 min chart and charts following in in the intraday timeframe will have to improve, I'd watch for improvement as we near the Spanish banking results at noon. The DIA opened a little better than the SPY, the QQQ/IWM were not much different from the SPY.

The 5 min chart which is a sign of the viability of a continued bounce saw a little more damage today on the open, but it is by no means too far gone, not even close, but it will have to be monitored.

As for futures on a short term intraday basis and a slightly longer...

 ES  1 min early this morning from the 3 a.m. European open to the far left to the current status, there continued to be a slight positive divergence in the 1 min chart, but early morning trade is not my favorite indication as there's a lot of manipulation of early orders, but in any case, it looks better than the alternative at this point.

 ES 5 min shows the positive divergence in the white square on Wednesday leading to yesterday's upside, as you can see and as was pointed out yesterday, even the 5 min ES chart went negative in to the highs yesterday sending it lower today, thus far there's little improvement here, but it will take a bit longer.

 NASDAQ futures saw a pre-market positive divergence that was crushed as the market opened, not much going on there yet.

And the 5 min NASDAQ futures showing the same positive divergence Wednesday leading to yesterday's upside and yesterday going negative leading to the overnight downside as well as this mornings. Again, no improvement here yet, but it's very early still.

Hopefully with yesterday's updates and last night's explanation and seeing the results of both, you get a better feel for the 3C signals as they not only gave us an opportunity to play the long side yesterday with leveraged long ETFs and make a quick buck, but also told us when it was time to think about exiting that trade.

Now it's simply a matter of watching the underlying trade for improvements which may lead to new long positions to play a bounce, but as usual we'll let the market tell us rather than guess.