Market/AAPL Update

 The DIA appears to be one of the weaker underlying averages, in the yellow box is the triangle I mentioned that has barely broken out, there's a leading negative divergence on this 1 min chart and there have been no positives even intraday.

 Again the 2 min chart confirms the same, DIA at the green arrows is not a positive divergence, just in line with price, but since the breakout of the triangle, a leading negative divergence is in place.

 The 5 min chart looks even worse.

 ES hasn't done much in the way of divergences most of the day, but there is what looks to be a leading negative setting up there, if it turns down shortly it will be confirmed and worse.

 The IWM is the one average that looks like it wants to try for higher prices, there's a positive divergence that is fairly large for an intraday chart.

 The same on the 2 min, recently there's been some negative activity, but I would guess that may be a consolidation comparing it to the preceding positive divergence, again intraday.

 While not as strong, the 5 min chart also shows a positive divergence, it looks like the IWM wants to try to catch up to the other averages.

 The QQQ is somewhat negative here on the 1 min, that leading negative in the red box could be part of a consolidation, we'll have to see if it dips even lower.

 The 2 min chart is showing what I hoped to see, underlying weakness.

 And the same on the 5 min.

 The SPY saw a small intraday positive earlier, right now it's in line with price on an intraday basis, longer term even on this chart, it's still in a leading negative position.

 The 2 min chart is about the same, except the leading negative and the longer chart is more bearish.
Essentially some intraday positive divergences that move price intraday, but the bigger picture is still weakness in to any gains in price.

 The 5 min chart is almost exactly the same, yet again because it's a longer chart, it is more bearish.

AAPL
You know I've been looking for a head fake move in AAPL, there are two components, 1) we need a breakout above an obvious level that gets buyers (retail) buying. 2) We need to see underlying weakness in to the price advance, same thing as the  GLD set up.

 Earlier I thought maybe the point in which the red arrow is toughing on the right may move higher with a move higher in AAPL, it didn't, in fact things have gone downhill since then.

 The 2 min chart shows exactly what I thought we'd see and why I said I was looking for a head fake break out and not just a breakout, the underlying weakness in to the price advance is what gives away the head fake move.

Look at the divergence on the 5 min chart since AAPL moved north of morning resistance, this is exactly what I thought we'd see.

Risk/Credit and Context

There are some surprising moves in these indicators, actually they are what I'd expect, but I think the extent or intensity is surprising in several.

Just for reference, this was last night's ES CONTEXT model, which showed ES trading rich compared to the model, it seemed like a pretty strong divergence as of last night, compare to today below.

This is today's ES model, to the left is last night's divergence, look how small it is compared to today's.

As for the VIX, it hit nearly 1 year lows today around 15 and has rebounded from those lows, the CONTEXT model still has VIX undervalued vs their proprietary model.

Commodity momentum vs the SPX (green)

 Intraday commodities are lagging a bit

 Looking at the entirety of the bounce, you can see the extent to which they are really lagging.
Note Friday's unusual activity that came unglued from the FX correlation, but still wasn't enough to bring commodities in line.

 A little longer view of commodity relative performance vs the SPX, it's just not there especially if you make a relative comparison as to where the SPX was in Feb (at the highs) and where commodities were at the same time vs. now.

Euro vs. SPX

 We see some mostly in line correlation, although the Euro did signal a divergence sending the SPX lower, at the yellow arrow is the strange activity Friday where the correlation completely broke down, it looks to me as if equities were manipulated higher and all of the arbitrage algos were turned off Friday.

 A still longer view of the Euro/SPX, green arrows show the correlation (roughly), red arrows show divergences when the EUR didn't follow the market higher and now since Friday, the divergence is pretty extreme. Based on looking at the history of these charts, there's almost always a reversion back to the correlation.

 Intraday the EUR on a RELATIVE basis, out performed a bit earlier, setting the market up for a move higher, that seems to have stalled.

 HY Corp. Credit is still not excited about the bounce, intraday it's selling off vs the SPX.

 Look at Energy's underperformance today...

 Over the last week or so, Energy has virtually nose dived.

 This is a longer term view, Energy was divergent at the 28/29 and March 1/2 sending the market lower or contributing to the move. Again look how divergent Energy's relative performance is now.

 Here are financials lagging today relative to the SPX momentum

 Look at the difference between Friday with Financials leading and today.

 Tech above was lagging the SPX Friday, but improving as the SPX was flat, that has continued today.

 This is the same chart, just with AAPL overlaid in light blue.

This is interesting, this is sector relative performance/rotation from Friday.

 Note Financials came back later in the day, the defensive Healthcare sector was rotating out, Energy was rotating out as was discretionary with Tech starting to rotate in.

Now below you can see Friday and today, this is where the extent of the moves are surprising.

Financials, Basic Materials, Discretionary and Energy vs Friday have fallen off a cliff, the defensive Utilities (red) and Staples have come in to rotation in a huge way, Healthcare and Industrials have held their ground. Tech is in rotation, but not to the degree of the other moves seen. This suggests VERY defensive rotation today.

AAPLUpdate

So far AAPL is doing what I thought, it's not been very strong thus far, even the reversal candle 4 days ago was bigger, but AAPL is at intraday resistance so it could still post a bigger candle, volume is pretty thin for this kind of a breakout move thus far. If you look at the other averages, you can see why I chose AAPL as the bellwether, the averages are very mixed, the IWM is down .44%, it may be because it doesn't have the same chance of positing a breakout move being the biggest laggard, the DIA is at +.18% and not moving much thus far, the SPY is down -.16% and the Q's are  down -.29%, but AAPL has a +1.10% move.

 This is the intraday resistance I mentioned, there may be some buyers waiting to see if that earlier intraday high is broken before stepping in as the rest of the market is mixed. If we had strong gains in the market averages along the lines of AAPL's today, I would think AAPL would have already pushed through this level.

 The concept here is no different then the GLD head fake trade we did a week or so back, price strength with underlying 3C weakness. GLD posted a local new closing high even after it broke out from resistance (which is what we expected the day before it happened) and the next day GLD was taken down hard. Again this is the point of a head fake move to set up a reversal, the longs that are trapped become fuel for the downside move and GLD made quite a move of over 5% in a day. The concepts are all the same, the only difference is this is on a larger and more important scale.

 AAPL 2 min, should have had enough time to catch up, so it's showing a little more weakness here at the same relative price level from early this morning.

 The 5 min chart with the positive divergences for the bounce and you can see the underlying weakness as AAPL moves higher.

The 15 min chart shows the same underlying weakness, although the 15 min hasn't turned down yet and could add a little more upside, it should still form a diagonal descending divergence as the price action would be lateral. So far so good. There are some short term trades I've been thinking about, but each move like this is unique and unpredictable, I'm a little hesitant to enter positions of any size right now. I am going to take a look through the watchlist though and see if anything really stands out beyond the uncertainty here.

Mat Update

 DIA 15 min doesn't look too good, but this is basically what I'd expect to see on a head fake breakout, longer term weakness and short term intraday positives to drive the breakout, essentially selling in to strength on a head fake or false move.

 The 5 min chart since the positive divergence for the bounce, this is the same positive divergence that has had me looking for the head fake move in AAPL, but all of the averages are close enough to do the same except the IWM which has been playing catch up recently as the best performer Friday (all of the other averages Friday closed +.18% to +.42 whereas the IWM closed +1.35% but is still the laggard).

 DIA 2 min weakness on Friday, most likely typical Friday selling with traders not wanting to hold over the weekend, here there's a positive intraday divergence, also note the slightly distorted triangle, it looks like it's being shaken out a little, similar to how both AAPL and IBM saw slight downside shakeouts before moving higher.


 DIA 1 min, this is an outlier as far as the rest of the charts... We'll have to see what develops here.

 IWM 5 min and the positive divergence last week on the bounce, the IWM optically looks stronger then the other averages, again it's also the biggest laggard so it has catching up to do.

 IWM 2 min with a negative Friday and a positive intraday today.

All of the other averages are near the top area of a couple of weeks ago, the IWM is the furthest from that. If the IWM is going to post a head fake move, it still has catching up to do.

 IWM 1 min has a nice intraday positive here, probably one of the stronger ones.

 QQQ the bigger picture on the 15 min chart, I guess you could call this a very small double top, with double tops and bottoms, the last move before a reversal is almost always a shakeout, with a double bottom, the second bottom hits a new low before moving higher.

 QQQ 5 min has a relative positive right now...

 Here's a wider view of the same chart, we have the positive divergence for the bounce from last weak, but as QQQ moves in to the area of a small double top, 3C was weakened significantly, again, this is the kind of underlying action I would expect and hope to see in this situation for a reversal move.

 QQQ 2 min is actually pretty weak looking here. This is a longer view, below is a closer view of the same chart.

 When looking at it intraday, there' a negative on the open, but it doesn't look quite so bad intraday, pretty much in line with price.

 QQQ 1 min with what is thus far a relative positive divergence unless it moves below the lows at the left of the arrow.

 SPY 5 min, the bigger picture here is weakness, but intraday there's a small positive divergence.

 It's pretty much the same on the 2 min. there's a small intraday  positive divergence inside a more powerful leading negative.

 A closer view reveals the intraday positive as well as an earlier negative on the open.

And the 1 min chart with an intraday positive.