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Two Ways: North Korea Bullies Asian Bulls

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Strengthen your portfolio in good times and bad.

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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.

Welcome back, Minyans. Good luck!

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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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