Intraday Pullback Highly Likely

However not every decline is bad, in fact earlier today, near the start of the day I mentioned that a "V" shape reversal is not a likely event even though it is more likely now than in a different situation, but still not likely.

I'll use the SPY as an example because they are the poorest performer today as I suspect we are seeing the same rotation we saw in the middle of October, one day Tech (today), the next Financials. Before showing you the SPY, I'll say that the QQQ especially, the DIA and IWM have all made a lot of progress today, the SPY has made the least, but I think that's more a function of financials which were clearly hoping for a Romney win judging by their contributions to each candidate.

Now the charts and understanding where the SPY is and then I'll show you the others, this actually gives us a good chance to take a good look at high probability trades at very low risk levels. Below I'll show you Tech vs Financials.

 The 1 min intraday SPY showing a negative divergence, most averages are showing some version of this, although it is clearest in the SPY. The S&P is financial heavy so as Financials are out of rotation even on a relative basis today, this is why the Tech heavy QQQ looks better. The rotation among these groups in the recent past has lasted about 1 day!

 2 min SPY is leading and making some progress, not like other averages.

 And the 3 min is leading and making some progress, but this is sort of a micro version of the range we were expecting after the October 18th top started to head down. That range was needed to build a divergence strong enough to make a significant move, much like a "V" reversal doesn't allow the time for the divergence to mature, a decline in prices to wherever, as long as it's close to today's lows allows the divergence to continue to develop. If Financials rotate in as showing better relative performance, then the SPY will have a stronger day than the Q's.

 On the 5 min chart where the repair needs to be made, a decline in price with an advance in 3C gives us that repair of the 5 min positive divergence. It also allows us to look at some Financials at a low risk area and see which are seeing interest.

 Financials 2 min showing a decent positive divergence, but to 2 min.

 The relative positive of the 5 min chart suggests Financials will see the same kind of move, price down, 3C up, that is the essence of a positive divergence.

XLK or Tech you can see is in much better shape today with the 5 min chart just about all healed up.