Daily Wrap

Something definitely feels different about this week and specifically today, you probably have noticed I've been getting more active in putting out position ideas and I suspect more are coming.

The GREAT Greek drama continues with today's emergency meeting of the Eurogroup to review the latest Greek proposal asking for a bridge loan, not new terms to the old bailout that they expressly don't want to continue in any way, shape or form. You also know what the Eurogroup/German position was... If the Finance Ministers of all of those countries gave me 1% of the gas, food and lodging they spent to go to Brussels to review the Greek submission, I would  have saved them 99% and be a rich man with the simple word, "Nein", not going to happen, why waste the time?

However once again, according to not 1, but 3,  "Sources" the Finance ministers or some portion of them and the Greeks have drafted a statement to serve as the basis of compromise which is to be reviewed by all Finance Ministers in Brussels tomorrow, the "Sources" sounded relatively optimistic, however how many of these sources have we heard of (never with a name) and how many times have they been right? ZERO (at least to the question of how many times they have been right).

In what I can only see as a further divide as the US today had our Treasury Secretary, Jack Lew call for the toning down of rhetoric between the two sides as apparently the US can't keep its nose out of anyone's business whether it be in the EU, your work-place, your Doctor's office or bedroom.

ZEEE Germans leaked a letter purposefully stating the 3 requirements Greece must agree to in order to reach a deal which included: 1) a CLEAR and CREDIBLE request by the Greeks to continue on with the current program which is a non-starter, 2) They will agree with the lenders as to any changes the lenders make 3) They will commit to fulfill the terms and conclude the program.

Additionally, any of the reforms Syriza campaigned on like labor reforms the Troika insisted on that have punished the working class in the name of austerity and social reforms all of which are to be voted on in Greek parliament this week will be rolled back, they will take no action that is at odds with the agreed upon austerity measures which is the basis of Syriza's entire campaign, basically Germany is saying, Alex Tsipras, you will renounce EVERYTHING you believe in and you will act like a good puppet / Goldman Sachs alumni/ Papademos.

If this ever gets resolved, I can't wait to hear what the terms are, I just can't see it though, I really cannot.

As for the averages today, a pretty lack-luster day except for the NDX which looks like it's forming the Igloo w/ Chimney top that is so often seen and Transports acted horribly today.

The Q's closed up almost half a percent while the R2K was flat, the SPX and Dow slightly in the red and transports slightly red, but look at transports intraday (salmon), they didn't act well at all after the a.m. session.

Crude bounced a little today, I think it makes another strong second leg higher, but I still think a slightly deeper pullback is probable. Gold and silver were down which is not a surprise, but they are also closing in on what looks like it will be an upside reversal in the not too distant future.

Treasuries also look close to rallying which means the market would almost certainly move down, see today's TLT update. We did successfully trade TLT long last year with some leverage and did pretty well, I'm not sure I trust the same trade now, maybe something shorter, but there are likely better assets/choices, depending ion your needs.

The afternoon and end of day trade saw sharper negative divergences, they seemed a little subtle at first, but they were indeed sharper and HYG saw a sharper negative divegrence short term, the longer term is negative and it also saw and EOD decline in to the close.

 Intraday HYG sharp negative divegrence.

HYG's larger trend (60 min) sharp negative divegrence

HYG's sell off in to the close from an already "red" position.

And HY Credit vs the SPX intraday today.

 This HY Credit divergence is EXACTLY the kind of divergence we look for in Leading Indicators to serve as a signal that the market is near a turn (down).

Additionally, pro sentiment is showing the same kind of divegrence we look for vs the SPX, also showing a negative signal for the market.

Yields were a non-factor today, but with the TLT charts looking as they do, I suspect they'll be headed lower soon, pressuring the market lower as well.

Commodities, if in fact they are acting as a leading indicator again as I suspect they are, diverged even more to the downside vs the SPX today.

As shown earlier, there's a lot of confirmation in leveraged market/sector ETFs and their inverse ETFs which is another thing I look for, multiple asset and timeframe confirmation.

As for the internals, the custom NYSE TICK indicator show internals getting weaker.

This is the entirety of the most recent cycle, note the TICK data falling off rather than increasing as it should in to higher prices or in the area of them.

As for other internals, of the 9 S&P sectors, 5 of 9 were green. Tech led at +0.35% and as I mentioned earlier with regard to financials and tech and leadership or rotation, yesterday's leader, Utilities was today's biggest laggard at -1.13%, this is a fairly common theme.

Of the 238 Morningstar groups we track, only 107 closed green. There was NO Dominant Price/Volume relationship today.

I think you can probably sense it through my tone, but I feel we are very close to a pivot and downside reversal in the market so i'll be looking at many more assets, like NFLX and AAPL mentioned today.

I'll check on futures in a bit and see if there's anything starting to standout there.

Tomorrow is a monthly options expiration so look for the max pain pin somewhere around today's close until at least 2 p.m., after that we should have some good data, but I suspect things are going to head south and very soon.