Good morning traders. Today’s comments are from Adam Grimes at The Macro Report.<\/p>\n
Two days ago, we wrote: \u201cBe aware that [global equity] markets are somewhat to extremely overbought, and though this makes them vulnerable to potentially sharp corrections, these corrections should be viewed as opportunities to add to longs. \u201c We believe that yesterday\u2019s rather sharp selloff was probably driven, in large part, by a \u2015feedback loop\u2016 between Metals and Mining Stocks, the broad market, and the Metals-related ETF products. (More on this in the section on metals.)<\/p>\n
Overbought markets behave like a house of cards\u2014the slightest push is often enough to cause a reaction out of all proportion to the initial stimulus, but it is vitally important to keep today\u2019s action in context of the big picture.
\nThat context is, clearly, that the market is in at least an intermediate term uptrend, or (if you want the media soundbite) a bull market. It would be extremely unusual for the market to have topped at these prices, never to return. It is far more likely that this weakness is simply a pullback and consolidation in the uptrend, and traders holding broad index positions should not exit into this weakness. Of course, anything is possible, and we will be closely monitoring price action over the next few days for signs that our bullish call is now wrong. To be clear, we see no signs of that in yesterday\u2019s action, and for now the uptrend appears to be robust and fully intact.<\/p>\n","protected":false},"excerpt":{"rendered":"