Early Update

Not only is early trade a lot of misdirection-triggering limit orders, hitting stops (mostly trades placed by 9 to 5-ers before they head off to work), but Monday mornings are especially bad as they've had more time to look at the market and place these orders which Wall St. dedicates a good part of the morning hitting (don't forget, all of these firms make money too just on order flow through volume rebates so if they can trigger a cluster of limit orders or hit a cluster of stops, the increased volume means increased rebates).

As mentioned in pre-market, there was about a 5-20 min old positive divergence just before the open, rather new and small, but 9:30 always brings a move that has momentum-for the exact reason I outlined above-regular hours open, the limit orders/stops are triggered.

In any case, this early I wanted to look at some of the primary drivers and see where they are.

Starting with the USD/JPY and Yen...

 This is the USD/JPY overnight and to present, I market the divergences, both positive and negative (this is a 1 min intraday chart so that's what these divergences show) and I also drew squares around price so you'd see the area of the actual divergence as it is not the entire arrow.

It looks like the pair is set to start the next leg lower and has started such since this capture. The move lower will put more pressure on the Yen momentum shorts that got monkey-hammered on the open last night with one being carried out after having to raid his/their silver position on a forced margin call in a very illiquid market sending Silver down huge.

 This is the correlation between the Yen (green) and SPY (red)- an inverse correlation which has been much tighter than any other currency, so its interesting to see what happens since last night's open as the Yen made a pop higher after a confirmed head fake move lower on Friday-also part of the manipulation allowing the SPY to move higher as you could see it in the USD/JPY, then at 4:01 after the market close, it reversed as if someone knew what was coming yesterday from the Japanese Economic Minister.

 Today's new correlation with the Yen significantly higher, if the correlation holds, the SPY owes some downside.

 After a correction in the Yen's move up overnight, it too looks like it is preparing for a move higher which we already saw on the USD/JPY above.

This is the 30 min chart of the Yen, the rounding bottom I have been mentioning all last week that I thought was more than half way complete, then Friday's head fake move as I said in reference to the SPY (but the Yen and any other asset as well), "No significant reversal occurs without a head-fake move" and we have found with a divergence, the head fake move seems to be one of the last things that happens before the reversal (to the upside for the Yen which has already started). Often these head-fakes immediately precede the reversal.

So beyond market implications, there are many interesting and confirming facts on this chart that verify the concepts we see in the market routinely.

 TLT-Treasuries with the accumulation that  sent TLT to the strongest 1-day move up in  5 weeks on Thursday and the immediate distribution after Thursday's SPY triangle failed to breakout sending TLT lower Friday-which is a positive for SPY momentum to the upside. TLT is in a large leading positive divergence.

 On this morning's gap up (pressures the market), there's a slight intraday negative on this 1 min intraday chart TLT has pulled back from, a gap fill would not be surprising, a gap would be, we barely ever see them left open anymore. However there seems to be some early improvement since this morning's divergence in TLT since this capture.

 VXX also gapped up off a positive divergence late Friday as it too was pushed lower to support the SPY breakout, right now it being higher also typically pressures the market, 3C is in line here-meaning moving with price.

 HYG is a High Yield Corp. Credit Bond ETF, it moving up is positive for the SPY, all of this was discussed last week and last night I gave an overview. HYG's trend is in trouble, it has had a near term bounce from last week, as you can see Friday's move higher was sold in to as well as Thursdays and this morning it is seeing even sharper downside 3C momentum.

The positive 3 min divergence in HYG is why I said it has more gas in the tank to make a move higher Wednesday as it did Thursday, but what I was most interested in was how the underlying trade looked, as suspected, it was distributed in to on any strength and as such, the 3 min positive that helped HYG all last week is now crumbling apart-the "Gas in the tank is draining".

More to come...