Morning Offering Optimism

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The huge opening gaps across the board appear to be holding up quite well after the first ninety minutes of trading this morning, offering up hope to bulls badly underwater on positions from the past two weeks. Virtually all of my channel checks for risk appetite are confirming this move, namely the Euro, Freeport, and the strong action in energy stocks. If you were all-in long, positioned for this move while enduring last week’s pain, then you are feeling much better today, in lieu of feeling like a sucker last week getting hustled out of a Thanksgiving rally. Emotions aside, though, the pertinent issue for me is whether to allocate fresh capital here to the long side. The answer is it largely comes down to your style.

When I see a daily chart like the XLY, ETF for the courser discretionary sector, gapping up directly into moving average resistance, I am inclined to show some more patience here and not feel compelled to chase too much. That said, I will be running all of my screens inside The PPT as this session develops, keeping an eye ouit for potential trading ideas.

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