I'll address the watering first then the yellow needles. It is possible you're overwatering. Trees do need daily watering for the first 1-2 weeks after planting, but then it's good to step back gradually to apply about 10 gallons per inch of trunk diameter each time the soil dries out (so more in summer, less in winter). Water out to the dripline of the tree (edge of the branches), not just right at the base. 

The yellow needles you see here are normal, conifers do lose their needles after 3-7 years depending on species, and this appears to be normal needle drop that occurs at this time of year. 

I hope that helps and let us know if you have additional questions!