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Monday Madness: Expect Volatility Today



June 27, 2011 – Comments (0)

This morning, the S&P 500 e-mini futures(ES U1) are trading higher by 0.75 cents to 1264.75 per contract. The worries in the European Union seem to be dominating the financial news headlines. Greece is facing another important austerity vote in their parliament. In any case, Greek debt yields are spiking higher this morning. Ireland and Portuguese debt yields are also surging and this tells us that the region is unstable at this time. Traders and investors should expect the European debt crisis to last throughout the rest of 2011.

Last night, the Asian Markets were mixed. The Nikkei 225 Index(Japan), and the Hang Seng Index(Hong Kong) traded lower on the session. Meanwhile, the Shanghai Index(China) and the Sensex Index(India) traded higher. All of the Asian markets remain very volatile at this time. The Asian economies continue to face high inflationary pressures. Traders can look for early strength in the iShares FTSE China 25 Index Fund (NYSE:FXI), and the India Fund(NYSE:IFN). Leading Chinese ADR's have been bouncing higher for about a week now. Just take a look at a chart of Baidu Inc.(NASDAQ:BIDU), the stock has rallied higher since June 16, 2011 when it traded as low as $114.14 a share.

WTI crude is trading lower this morning by 0.63 cents to $90.52 a barrel. The highly popular United States Oil Fund(NYSE:USO) is trading lower by 0.31 cents to $35.81 before the opening bell. Should the U.S. Dollar Index rally higher throughout the trading session oil could decline further.

Gold and silver are trading flat to slightly lower this morning ahead of the opening bell. These two precious metals are really currencies at this time. Both gold and silver have recently traded lower on the back of the stronger U.S. Dollar Index.

Traders should be prepared for another volatile trading session. Often, when the markets decline sharply before the weekend close the Monday opening is usually very weak.

Nicholas Santiago

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