Good morning traders,

Not a lot to write this morning, because the scenarios we need to watch are fairly simple and clearly defined.

• First of all, world equity markets are most higher overnight.  China, at 1.6% is leading Asia higher, and nearly all of Europe is roughly 0.5% higher.  The real winners in Europe are troubled Italy (+1.5%) and Spain (+1.6%).
• Some large moves in currency markets overnight, but no clear theme.  Yen is weak, Pound is strong, Auzzie is weak, but enough crosscurrents that it is really difficult to identify clear themes that should persist through the day.  Net impact on the US Dollar index is virtually nil.
• Metals are up slightly, and Copper more so than the Precious Metals complex.  London Brent Crude marked fairly strongly higher, while WTI is down in early trading.  We continue to see a bit more strength in distillates than Crude–this expansion in the crack could provide tailwinds for refiners.
• NYBOT Softs and Chicago grains are all higher in early morning trading.
• Yesterday, we saw two clear themes in the stock market:  Deeply oversold (short-term) Basic Materials found a bid, but the real winners were Energy (specifically Equipment, Services and Distribution (think OIH)) stocks.  Look for possible followthrough on some of these names today.  Miners and Industrial metals were also active and strong, while laggards were Aerospace, Food Producers and Electric Utilities (distorted by an important name that reported in that sector).
• Today, be aware that the market cleared and closed above important resistance yesterday.  It makes sense to lean long today, looking for possible expansion above resistance, but be aware of the possibility of a 2B failure.  If so, this entry on the second day is still a fantastic short-term opportunity for swing traders, but it is important to remember that this is an aggressive countertrend trade.  Risk management is key.  A number of names reported earnings after the close or in premarket.  Most daytraders will probably find their best opportunities in those stocks, but do not neglect the possibility of compelling sector plays in Energy or Materials today.