First let me deal with AAPL because so many emailed me yesterday asking if it was a good time to pick up Puts, my answer is no, we wait for the trade to come to us as there is less risk, the premium on the Puts is lower and the probabilities (so long as they are confirmed) tend to be higher. That said, AAPL does have enough of a positive divergence and lost enough ground yesterday in a parabolic fashion (I'm consistent with how I feel about parabolic moves up or down), that there's a reasonable expectation for AAPL to bounce even on an oversold bounce as charts in the intraday timeframe have enough positive divergences to lift AAPL, I personally would be patient and see if the trade will come to you on your terms.
As for the market and the single time frame positive divergences from yesterday as well as the futures overnight, here's where we stand.
The Euro got a boost overnight from what is assumed to be the German High Court dismissing another ESM complaint which should keep the court's ruling on the constitutionality of the ESM on track for release tomorrow. This of course effected risk assets overnight, but I don't see too many areas yet in which there's been much improvement from where we closed yesterday which left us with the assumption that we would see early higher prices in the averages, this also leads those higher prices open to being faded later in the day unless the charts below can improve and for the most part they haven't.
ES futures overnight and in to the open with the European open at the green arrow, note the positive divergence in addition to late yesterday's right before the European opening and a slight negative 1 min divergence. I wouldn't read too much in to the present divergence yet.
NASDAQ mini futures look very similar except the current divergence looks worse than ES.
The EUR/USD currently, that's quite a parabolic move, I don't expect it to hold too long.
The first chart of each of the averages as the DIA above is the positive divergence that was visible as of yesterday's close
as posted here. The same divergence from yesterday that was positive is having trouble staying in line with price this morning, it's not leading negative yet, but it isn't confirming price action either.
The next timeframe, which is where I want to watch to see if anything build, thus far isn't doing anything, this is 3 min.
Here's a closer look at the same chart on an intraday basis, it is actually negative so it is not building further strength, although I will keep an eye on it, thus far we don't have much more than a technical bounce from yesterday's divergences in the late afternoon.
The 1 min chart is not even confirming.
IWM 3 min from yesterday, it is not confirming and showing underlying weakness.
The next longest timeframe looks worse so there's no building on yesterday's divergences in the late afternoon, again suggesting not much more than a technical bounce at this point, we can expect to be faded.
IWM 1 min is about in line after a small opening positive divergence.
Yesterday's QQQ 2 min positive is building a bit on the 2 min timeframe, this may have something to do with AAPL as it represents 20% of the weight of the NASDAQ 100 or about the same as the bottom 50 NASDAQ 100 stocks combined.
There's also a little building on the 3 min timeframe.
1 min is in line with price thus far.
SPY divergence from yesterday is about in line with price this a.m.
There's not much going on in the next longest timeframe of 3 mins as of yet, I'll keep an eye on it.
And there appears to be some mild deterioration setting in on the 1 min, we'll see if that grows and moves to the longer charts.
The market may draft off AAPL, that would give us some good information about near term and longer term conditions. I would loo for a bounce in AAPL today, we'll see if and when a good time to fade that comes.
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