• I hope you enjoyed today's diary as much as I did.

By Ed Ponsi

Thanks everyone. I hope you enjoyed today's diary as much as I did.

Tim Collins will take the helm tomorrow and he will provide technical insight and much more. Thanks!

• Here are three items of interest.

By Ed Ponsi

Zynga (ZNGA) is trading lower after a big revenue miss.

CBS (CBS) is also down after a revenue shortfall.

lululemon athletica (LULU) up on news that founder Chip Wilson is selling half his stake in the company. 

• Gold continues to diverge from oil, which has broken its bullish trendline.

By Ed Ponsi

Gold is finally showing sign of life. Year-to-date, the continuous contract is in a sideways consolidation. However, gold caught a bid yesterday and followed through today.

Gold

Source: TradeStation

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Also, check out gold's moving average convergence/divergence (MACD) indicator, which is on the verge of flashing a buy signal (arrow).

Gold continues to diverge from oil, which has broken its bullish trendline.

Oil

Source: TradeStation

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That trendline, which formerly acted as support, is now an obstacle (arrows). The crude oil continuous contract shows a lower high (LH) and a lower low (LL), and its MACD indicator gave a sell signal at the end of July. 

• Stay tuned for earnings and other events that will occur after the closing bell.

By Ed Ponsi

The following companies are among those scheduled to report earnings after the close: CBS (CBS), Consolidated Edison (ED), Nvidia (NVDA), SolarCity (SCTY), News Corp. (NWSA), Salix Pharmaceutical (SLXP) and Zynga (ZNGA).

Later tonight, we'll hear from the Reserve Bank of Australia (monetary policy statement) and the Bank of Japan (press conference).

• Run, don't walk, to read Aaron Gell's article on Texas Pacific Land Trust on Business Insider.

The coolest/strangest thing I came across today was this article from Business Insider's Aaron Gell about Texas Pacific Land Trust (TPL).

You can't make this stuff up. The company has "a colorful history peopled with scheming robber barons, corrupt politicians, wildcat oilmen, farsighted hedge funders, and one rebel heiress...."

Oh, and the stock is up 73% year-to-date and has climbed an average of 41% per year over the past five years. I'm wondering if I can buy the movie rights.

• The stock is hitting multi-month highs in a soft market.

By Ed Ponsi

Is eBay (EBAY) getting ready to run? The stock had a rough start to the year, but it has found its footing and formed an inverted head-and-shoulders pattern.

eBay (EBAY)

Source: TradeStation

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The stock also managed to climb above its 200-day moving average (red). Earlier today, the stock reached its highest level since April 29 before pulling back with the market as the indices gave up earlier gains.

eBay's earnings report was received unenthusiastically by the markets last month, and the company's flagship website was hacked, leading the company to instruct all users to reset their passwords. Despite these negative events, the stock has moved higher.

You've got to respect a stock that can rally despite bad news. Now eBay is hitting multi-month highs in what has been a soft market over the past few weeks.

• At $106.10. 

By Ed Ponsi

I used to love this stock. Kimberly-Clark (KMB) was a great name to own over the past five years, more than doubling in value from its 2009 low.

Kimberly-Clark (KMB)

Source: TradeStation

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Kimberly-Clark reached its all-time closing high on July 16, just a few weeks ago. Since then, the stock has sold off heavily, breaking well below its 200-day moving average (red) on heavy volume. After trading as low as $103, the stock has bounced back above $106. I like the idea of selling shares into strength.

That's a brutal technical breakdown, but the fundamentals aren't pretty either. Revenue growth averages around 2% annually over the past five years. The stock has a price-to-earnings to growth ratio of greater than 2.5; a stock with a PEG ratio of 1 is considered fairly valued. I'm short at $106.10.

• Run, don't walk, to read Eric Jackson's latest column on Yahoo!.

By Ed Ponsi

In case you missed it, Eric Jackson made some excellent points in yesterday's column on Yahoo! (YHOO), contrasting its ad revenue growth with AOL's (AOL).

Although shares of Yahoo! have been drifting sideways for several weeks, one has to wonder where the stock would be trading if not for the upcoming Alibaba IPO.

• Rarely have I seen so many bearish indications in such a short time.

By Ed Ponsi

One of our readers mentioned Las Vegas Sands (LVS), so I pulled up the chart, and now I'm kicking myself because I didn't see this sooner. Rarely have I seen so many bearish indications in such a short time.

Las Vegas Sands (LVS)

Source: TradeStation

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Las Vegas Sands broke through a huge support level of $71 yesterday on heavy volume; the stock's moving average convergence/divergence indicator gave a sell signal late last week (shaded yellow). The 50-day moving average crossed below the 200-day moving average in early July (arrow), giving an early warning sign.

Ideally, I'd like to short a rally, but under very specific conditions. I'd love to short Las Vegas Sands near $71, former support that should now act as resistance. I'd prefer to see Las Vegas Sands rally on light volume after selling off on heavy volume, indicating that the sellers are more committed than the buyers. My target would be $55, based on both prior support and a measure of the topping pattern, which reaches above $88.

• Here's a blow-by-blow of Mr. Draghi's market-moving comments.

By Ed Ponsi

The euro swung wildly during Mario Draghi's press conference.

What follows is an illustrated blow-by-blow of Mr. Draghi's market-moving comments.

Euro-U.S. Dollar

Source: TradeStation

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Draghi came out swinging at 8:30 a.m. EDT, saying that the ECB was accelerating its preparation for asset-backed securities purchases (A), which sent the euro lurching lower.

He then indicated, however, that the ECB's inflation forecast was unchanged (B), and the euro recovered.

Based on the numbers coming out of Europe, it would've been no surprise if Draghi and the ECB had reduced their inflation outlook. Lower inflation would make a perfect excuse for additional easing. Euro climbed to nearly 1.3400 by 9:00 a.m. EDT.

Then at about 9:15 a.m. EDT, Draghi slammed the euro, saying that the European and U.S. rates would stay on a divergent path for a substantial time (C). The Fed is expected to raise U.S. rates next year.

This was quickly followed by the following comment (D): "Fundamentals for a weaker exchange rate are now better." In that one statement, he is both talking the euro lower, and talking smack about Europe's economies.

By the end, the euro was only marginally lower than where it began, but the range from 8:30 a.m. EDT to 9:30 a.m. EDT was greater than an average day's volatility.

• Run, don't walk, to watch Stacy Widlitz on CNBC.

By Ed Ponsi

Check outReal Money contributor Stacy Widlitz on CNBC this morning, giving a quick roundup of the retail sector.

Stacy raises an interesting question: Is it possible that retail is suffering due to a lack of talent in key positions?

• The U.S. dollar-Japanese yen currency pair and the S&P 500 are highly correlated.

By Ed Ponsi

A brutal move yesterday in the Japanese yen has been attributed to a fat finger; 24 hours later, the move has completely unwound.

The chart below shows the U.S. dollar falling sharply against the Japanese yen during lunchtime yesterday.

U.S. Dollar-Japanese Yen

Source: TradeStation

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The move is the equivalent of one day's volatility squeezed into a three minutes.

So far, nobody has stepped forward and admitted to a fat-finger error. There's a chance this wasn't a mistake at all.

Why should you care? Compare the activity in U.S. dollar-Japanese yen to the S&P 500 during the financial crisis.

U.S. Dollar-Japanese Yen vs. S&P 500

Source: TradeStation

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The U.S. dollar-Japanese yen currency pair and the S&P 500 are highly correlated. If yesterday wasn't an accident, and the U.S. dollar-Japanese yen is really being sold off, then the S&P 500 could follow it down -- just as it did from 2007 through 2009.

• Namely, the Bank of England and the ECB.

By Ed Ponsi

This morning, the Bank of England left interest rates alone, as expected. The European Central Bank also left rates unchanged, as anticipated.

As usual, the ECB decision will be overshadowed by Mario Draghi's speech at 8:30 a.m. EDT. Mr. Draghi has been known to create wild swings in the euro, which can create a knock-on effect in the bond and equities markets, so this affects everyone.

What should we expect? Draghi can be somewhat unpredictable, but it's safe to assume that he'll speak about targeted long-term refinancing operations, which is a fancy way of saying the ECB is going to loan a ton of money to European banks at extremely low rates. Also, look for indications that the ECB is laying out a detailed plan for quantitative easing. If Draghi fails to hit these points, the euro should rise after the speech, which is normally bullish for stocks.

• Maintain a heightened state of awareness.

By Ed Ponsi

Good morning, everyone! It's always an honor to fill in for Doug.

The overall market isn't far from its all-time highs, but the way certain sectors are crumbling gives one pause. It creates an odd, uncomfortable feeling, probably like the sensation Spider-Man gets when he senses that something is amiss.

Take the Utilities Select Sector SPDR Fund (XLU).

XLU

Source: TradeStation

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The ETF reached an all-time high on June 30, but now it's trading below its 200-day moving average (red). It's odd for any sector to fall apart that quickly.

Here's the scary part; as XLU broke that key moving average yesterday, its volume spiked to its highest level in years (shaded yellow). This isn't casual selling, especially at this time of the year.

This chart is foreshadowing higher interest rates, an unambiguous negative for equities.

Regarding the overall market, the key to the S&P 500 right now is the 100-day moving average. The next chart says it all.

S&P 500

Source: TradeStation

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Since the beginning of 2013, we've tested the 100-day moving average six times, and each time we've bounced (arrows). Now we're here again. Will it break, or will it hold?

That's for the market to decide, but one thing is certain -- there is no point in panicking as long as that moving average is intact. According to the chart, this is a normal pullback unless and until it breaks.

I'm not in panic mode, and you shouldn't be either, but you should maintain a heightened state of awareness. If you're familiar with the Spider-Man comic, you know what I mean when I say my spider senses are tingling.  I'm not running for the exit, but now is a good time to plan an escape route -- just in case.