Daily Wrap...

For reasons I just mentioned in the GOOG post, I'll try to keep this short. Credit for the second day not only didn't perform, it was really in risk off mode which is important. Yields have been negative for quite some time and they are like a magnet for equities so there's definitely some trouble there.

 HY Corp. Credit, a risk on asset had no confidence to follow the SPX yesterday, today it actually lost ground and went the opposite direction, thus one of the reasons the CONTEXT model was hitting huge divergences between the risk asset implied ES value model and ES itself.

Yields on a long term basis should move with equities as seen at the far left, they have been in a large negative divergence for nearly a month, I

The resolution of the EUR/USD triangle probably won't be a clean cut affair because it's such a common technical price pattern, but I have a hard time believing GS's $1.40 target, in fact since they put out their long EUR/USD note, the pair has been in a long triangle consolidation, the kind in which we normally see with distribution.

The Euro is definitely underperforming as it traces out this triangle and that's at odds with the market as they normally have a positive correlation.

 As mentioned this afternoon, the Euro gave some support to the market late in the day (yellow).

Longer term it hasn't made a higher high since mid January, around the Goldman long call, if you want to take free advice from a firm that trades against their own clients, that's up to you.

Not that I follow him, but I do respect him, if memory serves me correct, Tom DeMark's TD Sequential Top in the SPX was around $1492, we're at $1494.30 with a VERY small candle and some other interesting indications coming from my custom indicator that was DeMark inspired, but it is NOT TD Sequential or anything like it.

 My own indicator on the SPX has a broad sell signal which has been mostly around trend #1 which was expected to be  segue to trend #2.

Interestingly as you can see the indicator has called a lot of bottoms, we just got a signal in the VIX today, the VIX trades opposite the market and is showing extreme complacency right now, that's a dangerous time to be long and as I said, the last call was at the very bottom and the VIX rallied.

AAPL had an after hours 3C divergence (positive) , although we originally put 3C on TOS for after hours trade, we found it much more useful for futures so I never followed AH trade, but if that positive divergence in AH is correct, then a gap fill in the Q's and AAPL would be appropriate and certainly wouldn't do any damage to our analysis, in fact under the right circumstances, it may be the perfect storm, but we'll let the market tell us that. I do find the VIX signal very interesting though considering we just hit lows not seen since mid-2007 a few days ago, that's extreme.

The NASDAQ futures also have a positive 1 min divergence in them so they may look to fill the gap as mentioned above, ES and 3C right now are nearly perfectly in line.

As usual, if anything interesting develops over night, I'll let you know, but I'd think things won't move too much so those gaps can be filled, which doesn't bother me at all.