Good morning traders,

Yesterday was kind of a non-event for the US Markets.  We made multi-year highs overnight and opened higher.  As often happens, the entire move happened overnight and buyers were reluctant to bid up the already marked-up market.  At the end of the day we did see some selling come in, but it really seemed to be a lack of buying conviction rather than actual, panic selling.

Regardless, this is a market that will have a lot of crosscurrents to deal with today.  We had PPI and Retail Sales this morning, but the market is probably really watching the FOMC announcement this afternoon.  In fact, this should be the most important thing on the top of your notecard for the day — do not expect good broad market moves ahead of this meeting.  (Though there may well be good play in specific in-play names.)  Trade lightly if at all this morning, and make sure to save some bullets for the afternoon.  It seems to me that the short-term path of least resistance is down, but that is a slight bias.  I am certainly not willing to commit any risk on such a slight bias in a consolidating market.

As for commodities and other markets… it’s all about the Dollar which appears to have turned back down on higher timeframes.  I am tending to avoid the precious metals (though I have a slightly longer term short on in my daily advisory letter) because of all the crosscurrents as Silver and Palladium try to regain highs, while Gold and Platinum don’t really seem to be that interested in participating.  If you trade these stocks, you also need to be aware of the “divergence” (in quotes because it is only a divergence in terms of most recent data, not in the way the metals usually trade) between Copper and the precious metals complex recently.  Strength in Softs (Cotton, Sugar, Cocoa and Coffee) and Grains is most likely driven in the short term by the USD dip yesterday, but do not blindly assume that this will be a tight correlation going forward.

I will be watching some retail names this morning (BBY of course is the obvious standout), also some other names, but mostly trying to stay out from under the bus tires until the FOMC announcement.  Follow me on Twitter as AdamG_SMB and I’ll try to tweet if anything interesting pops up on the radar before then.