Good Morning Traders,

• We are coming in this morning to find world markets up strongly overnight.  Asia is mixed (Taiwan +1.6%, Hong Kong +0.7%, Japan – 0.5%), Europe up across the board (Europe Broad +1/2%, Portugal 2%, UK 1.2%).  South Pacific lagging a bit (Philippines -1.4%, Australia -0.5%), but these have been world relative strength leaders for several months.  The recent strong selloffs in these markets may be analogous to the way momentum stocks get hit hard when the market takes a pause–the key element to watch will be to see how quickly they are able to regain their highs.
• Swing traders need to be careful of fake breakouts in broad indexes.  Large consolidation areas like this often set up these false breaks, which are closes beyond the range that are quickly reversed the next day.  Be careful of assuming swing exposure on the close, and, if you do, be prepared to get out at the first signs you may be wrong.
• Some overnight moves in currencies demand attention this morning.  The Euro is genearlly stronger, while the Australian Dollar is down strongly against all of its trading partners.  The net impact of these moves in the US Dollar index is virtually nil, with the cash index standing +0.1% as of 8:40 EST.
• In terms of futures, Crude oil is up a bit while Natural gas is trading slightly lower.  Softs and Foods are generally up in early trading.
• Pay attention to precious metals this morning.  These markets have consolidated long enough that they may be coiled for significant moves.  Today is very likely a “breakout mode” day in Gold and Silver.  Be careful of fading.  Sadly, most metals and mining names have fallen enough recently that they are into large, messy areas of support.  This type of setup does not tend to lead to clean moves (compare especially to breakout trades), so there may not be easy plays in individual issues today.
• I am also watching Financials, Education stocks (for second day followthrough) and a handful of Tech names this morning.