{"id":9801,"date":"2011-02-10T08:45:20","date_gmt":"2011-02-10T13:45:20","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=9801"},"modified":"2011-02-10T08:49:02","modified_gmt":"2011-02-10T13:49:02","slug":"morning-thoughts-21011","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/morning-thoughts-21011","title":{"rendered":"Morning thoughts 2\/10\/11"},"content":{"rendered":"

Good morning traders,<\/p>\n

For many, many weeks, the pattern has been that every dip is bought.\u00a0 Every selloff finds ready buyers, and, so, there has been a complete lack of downside momentum on any decline.\u00a0 It is difficult to read a market that is consolidating sideways on low volume, so both bulls and bears are watching for a break of this pattern.<\/p>\n

This morning, we find world equity markets marked sharply lower.\u00a0 Asia is mixed (S Korea – 3%, Hong Kong -2.5%, China broad market +2.5%), but all of Europe is in the red with the average decline close to 2%.\u00a0 South Pacific markets were hit particularly hard, with markets in the region down nearly 3%.<\/p>\n

As would be expected, the US Dollar is strong this morning, probably reflecting a flight to quality mindset.\u00a0 We are seeing reasonably strong downmoves, for instance, in EURUSD, AUDUSD and NZDUSD, with corresponding strength in USDJPY, etc.<\/p>\n

Note that Gold and precious metals are actually down this morning.\u00a0 This may be an illustration of the claim I have made in my morning Waverly Reports for many months — Gold now trades as a risky asset just like any other commodity, and this shift has eroded its traditional place as a store of value.\u00a0 Most likely, this is not a permanent change, but it is the world we live in today, so do not naively assume that Gold will be strong in a time of crisis.<\/p>\n

Energy is slightly flat this morning, Chicago grains are down a bit in early trading, and most New York Softs are trading up.<\/p>\n

Today has the potential to be different.\u00a0 This is one of the days that has a setup that really could develop into a more serious decline, so be careful of buying the dip.\u00a0 Aggressive traders may wish to do so (it has been the right thing to do for many days), but acknowledge the downside potential as well–be very quick to admit you are long lest you find yourself 5-10 points out of the money on S&P futures very quickly.\u00a0 It also makes sense to be prepared to pursue the downside aggressively, but it is important to remember that there has been no followthrough for many weeks.\u00a0 If you position short and see no conviction, it may be the “same old …” so, again, be quick to admit you are wrong.\u00a0 In terms of sector plays, Energy, Financials and Tech should be attractive, while Industrials remain longer-term candidates for some good buys.<\/p>\n

1,310 on the futures, which was touched in early trading, is a good inflection point to watch, with probably another 10 handles of “easy” downside below.\u00a0 Remember, higher timeframe patterns are generally constructive for longs, so make sure to think of any decline in the proper context.<\/p>\n

Be flexible and be nimble today.\u00a0 Expect nothing and focus on managing the risk.\u00a0 Good hunting!<\/p>\n

\"Follow<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

Good morning traders, For many, many weeks, the pattern has been that every dip is bought.\u00a0 Every selloff finds ready buyers, and, so, there has been a complete lack of downside momentum on any decline.\u00a0 It is difficult to read a market that is consolidating sideways on low volume, so both bulls and bears are watching for a break of … 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":[943],"tags":[],"class_list":["post-9801","post","type-post","status-publish","format-standard","hentry","category-adam-grimess-blogs","no-post-thumbnail"],"yoast_head":"\nMorning thoughts 2\/10\/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-21011\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Morning thoughts 2\/10\/11 | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Good morning traders, For many, many weeks, the pattern has been that every dip is bought.\u00a0 Every selloff finds ready buyers, and, so, there has been a complete lack of downside momentum on any decline.\u00a0 It is difficult to read a market that is consolidating sideways on low volume, so both bulls and bears are watching for a break of ... 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