Again, as it has been for the last several weeks, the market is largely responding to the EUR/USD, as I showed you yesterday in the leading indicators post, the EUR/USD seemed to be the ONLY thing keeping the market from plunging (even though yesterday's 20+ ES point decline is huge and very volatile). The initial volatility in the NASDAQ especially this morning can all be traced back to one place, that is the currency pair or more importantly the US Dollar itself, although fears about the EU are reflected in the pair so it seems to be a better proxy.
Again the pre-market negative divergence in the EUR/USD...
The pair responding to that divergence as the Euro breaks the trendline lower and as it does so...
NASDAQ futures plunge hard.
Still I would not discount the 2 min positive intraday divergences I showed in the opening indications post quite yet, but at this point they are really only worthwhile as a tactical tool to enter positions for a downside move, they are not large enough to be tradable. More importantly I wouldn't forget about the much bigger, much clearer 10-60 min negative divergences in place on all of the averages and getting worse.
We will take a look at leading indicators after the morning trade has burned off.
Last night the dominant Price/Volume Relationship across the board was price down/volume down, which means there is no kind of oversold tension and this is the MOST COMMON dominant relationship during a bear market or bear move.
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