On Friday the Nasdaq diverged sharply from the Dow and S&P on the back of Google's earnings report. After today's close Apple earnings are out. Given how sharply AAPL shares have risen into earnings it's pretty much a given that the Apple report will provide the sell-the-news type of event that early entry tech buyers have been looking for.
The major indices don't diverge for long and given the idea that AAPL earnings will offer a profit taking opportunity we suspect that the Nasdaq will come back to earth as opposed to the other indices playing catch up.
The S&P has now given us 3 reversal signals in a row and with conditions this overbought, we are looking for some type of correction early this week. What we do know is we won't be drawn in by a strong opening either today or tomorrow as the chances for a reversal after the AAPL report are just too high for our level of risk tolerance.