Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

The New Trading Normal

The overnight trading session leading into midweek trade saw very little price movement in equities, commodities, and currencies, as recent moves to balance the risk from civil unrest in the Middle East and the devastating effects of the earthquake in Japan have found near-term fair value. After a period of trade that has being driven by the fundamental side of the market, now could be a period of trade that consolidates around technical price points.

Asian, European, and US equity futures trade are at their opening prices ahead of the Wall Street session, with the S&P 500 highlighting once again how important the 1250 price point really is. The previous client note highlighted that historical movement through 1250, both going long and going short, has tended to lead to sustainable price action movement. The 100-day simple moving average is sitting at that price point, and a weekly close above or below that area would indicate from a technical perspective that momentum has found the path of least resistance on the S&P 500. At times like these, when there seems to be as many economic question marks as there are answers, sentiment reads become very important as a way to gauge potential trend reversals, or continuations.

Interest rate markets have seen a move lower on the benchmark 10-year Treasury note, which trades around 122.00, just above the 100 and 200-day simple moving average areas. As note values go up, yield values drop, and Treasury note trade is indicating that the path of least resistance for interbank trade will be to maintain the virtual zero percent interest rates that most major central banks are currently holding.

There has been very little movement in commodity market trade, with precious metal and bullion markets absorbing the previous session of trade that saw profit-taking on a grand scale. Gold has settled around 1400 on the current futures contract, while silver has held around 34.00 after a solid test of support that dropped values from 36.30. The same as in equity trade; there are no clear-cut signals coming from the global commodity markets at this time.

The dollar index continues to hold above the 76.50 inflection point that has been highlighted over the course of the last month of client notes. There really does not seem to a global desire to be the long the US dollar from an economic standpoint, but it does however seem to be a need to move dollar values higher as a hedge against the global reserve currency having a weak-dollar policy within the US.

The major forex pairs moved absolutely nowhere overnight, with all of the main currencies back to their opening prices. Four hour trend and momentum reads are still showing an overall short dollar outlook, but it will be very difficult for the global market to now break and easily hold below 76.00 on the dollar index. The last six months have strongly tested the inverse correlations between global risk and interest rate markets against the US dollar.

With Black Swan events now coming at a fast enough pace on a month-to-month and quarter to quarter basis, a new trading pattern is being formed. Stability, consistent volume, solid outlooks, and correlated markets which were free to react to mid-and long-term views, have transposed themselves into sporadic, low-volume, daily price moves that are very reactive to the opening and closing of each regional session. Black Swans are rare, and used as a euphemism him for unique and sometimes challenging periods of time, which now are becoming more and more the norm.

In general, the near-term outlook is likely to be to sell resistance and buy support on any given market, as each regional session gets underway, leaving a balance to run that would catch any potential break-out moves that do then shown ability to hold. These are testing times for traders and investors as global markets become more reliant on sentiment changes as each 8-hour session completes, with overlapping and choppy electronic trade that switches gears at a fast pace. Bank early and bank often.