Minyanville's Before The Bell: China Steamin' Ahead; U.S. Slowing Down
China's economy grew 11.5% yet Shanghai fell. U.S. economy is expected to slow. Futures inch up.
Bloomberg reports China's economy grew 11.5% in the third quarter matching consensus estimates. GDP figures for the previous quarter came in at 11.9% marking the fastest pace in 12 years. Just recently, the National Development Reform Commission (NDRC) said the government should revalue the yuan by as much as 20%. Read Professor Cooper's Like A Bull In A China Market and Professor Warner's Doin' It Bloggystyle: Tick, Tick, Boom Goes China
The Bull Pen: The Powershares dollar bearish ETF (UDN) may be an option for Chinese bulls. Near-term traders may set sell-stops below the 10-day moving average ( 27.44) or the 50-day (26.93).
The Bear Cave: The iShares China 25 index (FXI) is extended, up 85% from the August low. Traders looking to play the downside could reasonably set stops above 220, which would be a new high.
U.S. Slowing Down
The WSJ reports many investors will be watching the release of the McGraw-Hill Construction report that will forecast spending on commercial and manufacturing buildings. Such expenditures are expected to decline by 7% in dollar volume next year and 10% in the number of square feet of space built, signaling a sharp turnaround from an increase of 11% this year. Read Professor Prieur du Plessis' article Does The Big "R" Lie Ahead?
The Bull Pen: Investors believing the economy may be slowing may look to the iShares 1-3 Year Treasury ETF (SHY) or, for added inflation protection, the iShares Lehman TIPS bond ETF (TIP). For the SHY, near-term sell stops could be placed at $81, which corresponds with the high on October 3 rd and the 50-day moving average. For TIP, sell-stops could reasonably be placed below recent support at $102.38.
The Bear Cave: The UltraShort Basic Materials (SMN) may be an option for traders playing the downside. Stops may be placed below the all-time low at 41.71.
Click on Minyanville's Stocks To Watch for more company-specific ideas.
A Quick Check Around the World
Asian markets were mixed. The Hang Seng gained +1.78%, the Nikkei fell -0.45%, the Sensex added +1.39%, Taiwan add +1.33%, and the Shanghai fell -4.8%.
European markets are trading higher. The CAC is up +1.47%, the DAX is up +1.38%, and the FTSE is up +1.40%. As of 8:30 AM EST, S&P futures are up 0.90 points and Nasdaq futures are up 12.0 points.
A Look At Commodities
Commodities are stronger this morning. Crude is up +1.41 at 88.51. Metals are higher as well with gold up +5.1 to 770.7, copper up +0.03 to 3.48, and silver up +0.18 to 13.77. The dollar index (DXY) is down -0.22 to 77.32.
On the Radar
Durable orders and Initial Claims is due out at 8:30 AM EST. Consensus estimates call for an increase of 1.5% in Durable orders. At 10:00 AM EST, New Home Sales data will be released with figures expected to come in at 785k.
Click here for Minyanville's full Trading Radar.
Check out Hoofy & Boo's new video when you get a chance. Good luck and have an excellent day!
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