The emerging markets trade is back on. They got oversold after all the hedge funds reduced their weighting in the sector. China has been on fire lately. The funds are just back to beating up on the helpless, Europe.
Crude oil continues to look like a bull trend that won't stop until we go still higher. I haven't seen a climactic move that usually signals a reversal. Anectodally, I am hearing of hedge funds derisking like they did in May 2010, but to a much less extent.
A reversal from a healthy gap up to even on the futures is a bad sign for the first couple of hours of trade. I will take that to mean that we have early weakness followed by strength in the afternoon. No one wants to be short in the overnight session when we've had so many of these mindless gap ups on nothing.
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