{"id":9412,"date":"2011-01-26T08:57:41","date_gmt":"2011-01-26T13:57:41","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=9412"},"modified":"2011-01-26T08:57:41","modified_gmt":"2011-01-26T13:57:41","slug":"morning-thoughts-126","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/morning-thoughts-126","title":{"rendered":"Morning thoughts 1\/26"},"content":{"rendered":"<p>Good morning,<\/p>\n<ul>\n<li>In big-picture context, very little has changed over the past several days.\u00a0 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.\u00a0 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.<\/li>\n<li>A generally positive tone rules in world equity markets this morning.\u00a0 Asia is up (ex Japan, which is 0-.5%).\u00a0 Europe is up stronly across the board, with several major markets and broad European indexes putting in 52 week highs overnight.<\/li>\n<li>Muted forex activity overnight leaves the British Pound slightly stronger (again, crosscurrents) and the US Dollar index down slightly as New York markets open.<\/li>\n<li>Precious metals slightly stronger this morning.\u00a0 The big picture in these markets is anything but clear.\u00a0 On one hand, the leaders (Platinum and Palladium) have stumbled at the highs while the laggards have been sold off into support.\u00a0 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.\u00a0 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.<\/li>\n<li>Crude Oil up reasonably strongly this morning, but in the big picture, recent weakness has probably severely deflated the bull case.<\/li>\n<li>NYBOT softs and Chicago grains are marked strongly higher in early trading.<\/li>\n<li>There is a potential setup in the broad indexes that swing traders need to be aware of.\u00a0 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.\u00a0 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.\u00a0 Swing traders will have an A++ setup on a day that makes new 52 week highs and closes under the previous level.\u00a0 The correct trade (2B top) is to go home short on that close with a hard stop above the new 52 week high.\u00a0 Risk management is essential as this is an aggressive countertrend trade.<\/li>\n<li>To be clear, this is a <em>trade<\/em> and not a large-scale bearish call on US Equities.\u00a0 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.)<\/li>\n<\/ul>\n<p><a href=\"http:\/\/www.twitter.com\/AdamG_SMB\"><img decoding=\"async\" src=\"http:\/\/twitter-badges.s3.amazonaws.com\/follow_me-c.png\" alt=\"Follow AdamG_SMB on Twitter\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Good morning, In big-picture context, very little has changed over the past several days.\u00a0 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.\u00a0 This type of price action is perfectly normal in consolidation areas while the market backs and fills, and &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/morning-thoughts-126\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":388,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-9412","post","type-post","status-publish","format-standard","hentry","category-general-comments-2","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Morning thoughts 1\/26 | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/morning-thoughts-126\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Morning thoughts 1\/26 | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Good morning, In big-picture context, very little has changed over the past several days.\u00a0 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.\u00a0 This type of price action is perfectly normal in consolidation areas while the market backs and fills, and ... 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