{"id":9674,"date":"2011-02-04T08:58:28","date_gmt":"2011-02-04T13:58:28","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=9674"},"modified":"2011-02-04T08:58:28","modified_gmt":"2011-02-04T13:58:28","slug":"morning-thoughts-2411","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/morning-thoughts-2411","title":{"rendered":"Morning Thoughts 2\/4\/11"},"content":{"rendered":"<p>Good morning traders,<\/p>\n<ul>\n<li>Short term traders can sometimes lose sight of the big picture, so it is useful to have a reminder.\u00a0 The daily chart of the S&amp;P Cash index shows a market that 1) is in a pretty clear and obvious uptrend, 2) is not quite as overbought as many of the internet kibitzers would have you believe and 3) has a fairly significant trend channel line about 25 handles ( = 2.50 in SPY) overhead.\u00a0 Also, consider that when the market does roll over into a pullback, it will very likely be in context of this bigger picture uptrend.\u00a0 There will certainly be money to be made on the short side, but managing shorts in a bull market is very different than shorting in late 2008.\u00a0 We will cross this bridge when we come to it.<\/li>\n<li><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/02\/HOME-2-4-2011-1.48.02-AM.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-9675\" title=\"HOME 2-4-2011 1.48.02 AM\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/02\/HOME-2-4-2011-1.48.02-AM.png\" alt=\"\" width=\"552\" height=\"353\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/02\/HOME-2-4-2011-1.48.02-AM.png 788w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/02\/HOME-2-4-2011-1.48.02-AM-300x191.png 300w\" sizes=\"auto, (max-width: 552px) 100vw, 552px\" \/><\/a><\/li>\n<li>Note that interest rate futures may have significant downside (in terms of prices which move inversely to rates).\u00a0 Longer term, ETF products like TBT and TLT are very, very poor proxies, so you must do analysis on the 10 or 30 Year futures.\u00a0 This is important even for short-term traders, because clearly trending bond prices (and rates) have improtant implications for Equity market psychology.<\/li>\n<li>We are still not seeing any convincing buying pressure in the precious metals.\u00a0 Gold can&#8217;t really lift off of support while Platinum and Palladium press through resistance.\u00a0 If you are holding swing longs, consider how you would manage the downside if the complex melts.<\/li>\n<li>This morning we find fairly lackluster sessions in global equities.\u00a0 Japan is up a percent (and made a new 52 week high overnight) and India down 2% (which is not a big move relative to the volatility in that market.)\u00a0 Europe is as flat as I remember seeing it in recent months (standouts are Ireland +1.2% and Belgium (??) down 0.5%).\u00a0 S&amp;P futures ticked to a new 52 week high in the overnight session as well.<\/li>\n<li>Some moves in forex deserve out attention:\u00a0 Looney is strong (see CADCHF, GBPCAD, etc), and the Auzzie continues its recent rally.\u00a0 (AUDJPY may have some more extended upside potential.)\u00a0 Probably no direct impact on commodities in the short term, but something to keep an eye on.\u00a0 Net impact on the US Dollar index is slightly positive in early trading.<\/li>\n<li>From my morning <a href=\"http:\/\/www.waverlyadvisors.com\/\">Waverly Advisors<\/a> report on precious metals:<\/li>\n<\/ul>\n<ul>\n<blockquote>\n<li><em><strong>Platinum<\/strong> is pressing to multi year highs while <strong>Gold<\/strong> and <strong>Silver<\/strong> have yet to pick up the strength.\u00a0 (Gold\u2019s move yesterday was fairly large as a standard deviation, but, in terms of market structure, it cannot lift far off of support.)\u00a0 Gold futures have significant downside potential below 1,315 (basis April futures); this has implications that must be considered for stop placement.\u00a0 Dropping 1,315 (not a clean level) probably targets 1,250 fairly quickly, so stops located between 1,250 \u2013 1,300 are most likely targets.\u00a0 Plan accordingly.<\/em><\/li>\n<\/blockquote>\n<\/ul>\n<ul>\n<li>Also, keep an eye on grains which may be staging a significant move.\u00a0 Rice and Wheat, in particular, should be on your radar.<\/li>\n<li>As far as short-term trading goes today, nothing is really changed from my comments on recent days.\u00a0 1306 is the line in the sand on the futures; holding above this line could finally get us a good breakout and a more directional move.\u00a0 Failing back below, my baseline expectation would be flat and consolidation (remember, every dip has been bought), but also consider the possibility of a Friday dogpile out of a market that fails at the highs.\u00a0 Even though this is unlikely, it could be dramatic so it&#8217;s worth your time to consider how you would aggressively press shorts if this scenario is in play.\u00a0 Do not anticipate or fish for this scenario, but wait for the clear momentum to show you it is in play.\u00a0 (A Waverly client asked me midweek how we would know the short scenario is in play.\u00a0 After outlining a few specific momentum cues to watch for, I ended with, &#8220;it&#8217;s like porn.\u00a0 You&#8217;ll know it when you see it.&#8221;\u00a0 This seemed to sum it up pretty well for him!)<\/li>\n<li>Don&#8217;t forget there are also a number of earnings stocks that should be in play.\u00a0 Keep healthcare stocks (HUM UNH WLP) on your screen today for some possible followthrough.<\/li>\n<\/ul>\n<p>AG<\/p>\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>Morning Thoughts 2\/4\/11<\/p>\n","protected":false},"author":388,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[943,1],"tags":[],"class_list":["post-9674","post","type-post","status-publish","format-standard","hentry","category-adam-grimess-blogs","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 2\/4\/11 | 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-2411\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Morning Thoughts 2\/4\/11 | SMB Training\" \/>\n<meta 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