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Before The Bell: Goldman Smells Danger, Crude Oil Correction, Futures Flat


Goldman Sachs smells of danger in the emerging markets. Crude Oil falls over a dollar. Futures are flat.

Morning Perspective: Smell of Napalm In the Morning

The Telegraph reports Goldman Sachs (GS) has begun to cut exposure to emerging markets due to fears that global credit market turmoil could trigger a painful correction in the markets of Latin America, parts of Asia, and Eastern Europe. The bank has closed its positions on Brazilian and Mexican stocks although it said it remains bullish on the emerging markets in the long run. For more on the credit markets, read Toddo's Little Miss Sunshine. Also read Professor Depew's Five Things You Need To Know.

From the Bull Pen: Those bullish on the emerging markets may find appeal in Freeport McMoRan (FCX), a company that benefits directly from high emerging market demand for copper. Sell-stops may be placed below $106.59 (50-DMA).

From the Bear Cave: Bears may see a play in the iShares China 25 index (FXI), particularly if we see a rally back to $195 (with stops set above $200).

Crude Oil Correction

The AP reports oil fell more than $1 to below $95 after Saudi Arabia's oil minister said that OPEC would discuss boosting oil output at an upcoming meeting to cool soaring oil prices. Oil prices have recently surged to almost $100 per barrel amid tensions in the Middle East, weak supplies, and the falling dollar. Saudi Arabia is said to be pushing for an extra 500,000 barrels-a-day hike in output by OPEC, or 1.8%. Last week, Toddo mentioned the dollar slide in Answers I Really Wanna Know. Also read Professor Shedlock's What's Really On the Fed's Mind?

From the Bull Pen: Oil bulls may look to Anadarko Petroleum (APC) as long as it holds its trend-line above $57.

From the Bear Cave: Those believing oil will continue to correct may play the downside with the Oil ETF (USO); buy-stops above the 52-wk high, $76.32.

Click on Minyanville's Stocks To Watch for more company-specific ideas.

Quick Check Around the World

Asian trading closed with the Hang Seng -3.88%, Nikkei -2.48%, Sensex -1.69%, Taiwan -3.35% and Shanghai -2.40%.

A quick check towards Europe is mixed with the CAC -0.25%, DAX -0.33%, FTSE +0.23%, ATX +0.37%, Swiss Mkt. -0.10% and Stockholm -0.01%. %.

A Look At Commodities

Crude oil is lower by –1.41 to 94.91. Gold is weaker by –19.9 to 814.80. Silver is down as well –0.47 to 15.070 and copper is down –10.30 to 304.25.

As of 8:30 AM EST, S&P futures are up by +0.10 points and Nasdaq futures are down by –3.00 points.

On the Radar

There are no economic events scheduled for today.

Click here for Minyanville's full Trading Radar.

Happy Monday, Minyans! Have a great day!
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