Two Ways: North Korea Bullies Asian Bulls
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Missile Tests Fuel Geopolitical Tension
Stocks in Asia fell last night over worries of increasing geopolitical tensions. The Wall Street Journal reports South Korea's Kospi Index rose a little over half a percent in early trading but rolled over on news that North Korea is preparing to test-fire more short-range missiles after its second nuclear test on Monday.
News of South Korea announcing that it would fully participate in a US-led Proliferation Security Initiative (PSI), a program to stop the spread of weapons of mass destruction, also seemed to weaken investor confidence. Previously, North Korea has said that should Seoul participate in the initiative, it would be seen as a declaration of war. The South Korean won dropped to near two week lows while the Kospi index fell last night by 2.1%.
From the Bull Pen: This pull back in Chinese stocks may be an opportunity for the intermediate to long term investor. Consider initial positions in the Morgan Stanley A Share fund (CAF) into its support levels near $30 and then $27. A sell stop can be set below that level.
From the Bear Cave: Overall, bears can keep an eye on the S&P 500 (SPX). A break below 880-875 support and the 50 day moving average (850) comes into play. One can use the SPY ETF with a buy stop near $89.50-90.
Quick Check Around the World
Asian trading closed with the Hang Seng -0.76%, India -2.33%, Nikkei -0.39%, Shanghai -0.82% and Taiwan -0.76%.
Glancing towards Europe, we see the CAC -2.00%, DAX -2.25%, FTSE -1.28%
As of 8:00 AM EST, S&P Futures are trading -5 to 893.00, and Nasdaq futures are +6 to 1374.00.
A Look at Commodities
Over in commodities, crude oil is trading -1.32 to 60.35 while gold is -13.2 at 945.70 this morning. Silver is -0.290 to 14.40 and copper -3.45 to 206.30.
The dollar index is +0.5100 to 80.6250.
On the Radar
09:00 S&P/Case Shiller Home Price Index -18.4%
10:00 Consumer Confidence 42.0
Click here for the full trading radar.
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