Good morning,

• In big-picture context, very little has changed over the past several days.  Crosscurrents are the rule as large moves from one day are reversed the next, and there is little or no broad market follow through in most asset classes.  This type of price action is perfectly normal in consolidation areas while the market backs and fills, and seeks the next directional leg where there will be some real conviction.
• A generally positive tone rules in world equity markets this morning.  Asia is up (ex Japan, which is 0-.5%).  Europe is up stronly across the board, with several major markets and broad European indexes putting in 52 week highs overnight.
• Muted forex activity overnight leaves the British Pound slightly stronger (again, crosscurrents) and the US Dollar index down slightly as New York markets open.
• Precious metals slightly stronger this morning.  The big picture in these markets is anything but clear.  On one hand, the leaders (Platinum and Palladium) have stumbled at the highs while the laggards have been sold off into support.  On the other hand, some members of the complex are possibly oversold (which is more meaningful in consolidation than in trends), and are sitting on fairly major support areas from which we could reasonably expect a rally.  Do not be surprised to see strength in the complex over the second half of this week, but I do not see clear setups here for swing traders.
• Crude Oil up reasonably strongly this morning, but in the big picture, recent weakness has probably severely deflated the bull case.
• NYBOT softs and Chicago grains are marked strongly higher in early trading.
• There is a potential setup in the broad indexes that swing traders need to be aware of.  We have had a situation over the past week where the market was set up for a potential break and the beginning of a pullback, but bulls supported and, so far, the pullback has not materialized.  In fact, the longer we consolidate near 52 week highs, the more complacent many traders will become, and this sets up a potential bull trap at the highs.  Swing traders will have an A++ setup on a day that makes new 52 week highs and closes under the previous level.  The correct trade (2B top) is to go home short on that close with a hard stop above the new 52 week high.  Risk management is essential as this is an aggressive countertrend trade.
• To be clear, this is a trade and not a large-scale bearish call on US Equities.  This trade setup also fails frequently, so it is important to not be stubborn and to stop out immediately if your stop level is reached (though there may be an opportunity to re-enter on a second failure either that day or the next.)