The big news for today is that the German Constitutional Court, allowed for the ratification of the ESM by Germany as was widely expected, the catch was the details. The court capped German liability to the fund at $190 bn Euros without approval of the German Lower House. Initial reaction to the decision was favorable in European Financials, especially in PIIGS countries, but wasn't all that strong across the board, the Spanish 10 year is where my interest primarily was, it did have a slightly negative reaction as the yield ticked up from 5.67% to 5.70%.
The Euro which is less of a stable metric in my opinion, had a positive reaction, but like all of these major policy decisions that revolve around central banks and their policies, you have to expect a knee jerk effect and the Euro now seems to be losing some enthusiasm.
EUR/USD from yesterday's 4 pm EDT close to present
Around the time of Barroso's speech and next the High Court decision, an obvious algo stop run and a move up, that momentum is falling off.
Gold did move higher initially, but that was short lived.
Mini Gold Futures overnight at the Court's decision popped, then went negative and have now given up just about all of the decision bounce.
GLD was already under strategic pressure as seen on 30 min and longer charts (and shorter).
On the open, the smaller red arrow shows a lack of any confirmation in GLD's gap as it is quickly faded. Gold is significant as a barometer of easing bias or really anything from the Central banks that give traders hope equities will run higher on their flow or printing-there has been a lot of controversy around the ESM, even though Draghi claims all transactions will be sterilized and therefore no new money will enter the economy/markets, many believe it to be inflationary and Argentina's attempt to do something very similar in the late 1970's did lead to hyper inflation.
Crude Futures which already looked like they were getting a little overdone, seem to have fallen not only with a 3C negative divergence, but also news that the US Ambassador to Libya and 3 aides were killed in a rocket attack on his car as he was rushed out of the consulate after militants stormed the building (sounds like Egypt yesterday) over an American made film that insulted the Prophet Mohammad.
Picture of the attack on the Consulate...
Crude Futures...
Again there's macro pressure on Crude after what looks to have been a several month counter trend rally that appears to be near a turning point...
4 hour chart with the June positive divergence starting the rally and a negative divergence quite a bit larger than the first negative sending Crude lower from the February highs.
On the open, USO is showing decent confirmation off a late day positive divergence, still within the intraday timeframe though.
As for the averages opening indications, the SPY/IWM showed opening confirmation, the DIA/QQQ did not.
And AAPL fell short of opening confirmation and has faded most of the gap up, that shouldn't be read in to too much as AAPL could still build a stronger positive divergence if it remains low or range bound.
AAPL open.
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