Good Morning traders,

• World markets are mixed this morning.  Asia sharply higher 1.2% to 2.7%.  Europe is a little soft this morning, down an average of about 0.8% (broad European index -0.5%).
• We do have some decent sized moves in currencies to start the week:  the Euro is weak (EURUSD EURJPY EURCAD all down) and NZD is weak.  With the EURUSD fairly sharply lower, the net impact of many factors on the US Dollar is to mark the index 0.5% higher in early trading.
• Precious metals are up slightly and pressing the highs of their overnight range.
• Crude oil is weak while distillates are strong, which equals more pressure on the Crack.  Look for this to be a persistent theme over 1H 2011.
• New York Softs are mixed (Coffee and Cocoa up, Sugar and Cotton down), and Chicago grains ex Beans are strong in early trading.
• S&P futures ticked to new 52 week highs overnight, before backing off.  Under normal circumstances, this would set a pretty bearish tone for the morning’s session, but these are not normal conditions.  The “buy the dip” pattern is intact and shorts have been punished at every turn.  As tempting as it is, it makes no sense for most traders to take losses on the short side in this environment.  Wait for something to change and wait for a clear sign before trying shorts.  It may come today, it may come a month from now, but until the time comes, focus on the longs.
• Expect more back and fill and chop today unless the market does sell off.  It is somewhat unlikely that we will see clean momentum to the upside, but be mindful of the breakouts most indexes staged as of Friday’s close on daily charts.