Last night, the Asian stock markets sold off sharply lower. The Hang Seng(Hong Kong stock index), and the Shanghai Index(Chinese stock index), both declined by more than 2.0 percent. The declines in the Asian markets will usually effect the leading commodity stocks that are traded in the United States stock markets. Copper stocks such as Southern Copper Corp.(NYSE:SCCO), and Freeport McMoRan Copper & Gold Inc.(NYSE:FCX) are two leading commodity stock that will start the session on the weak side ahead of the opening bell. AK Steel Holdings Corp.(NYSE:AKS), and U.S. Steel Corp.(NYSE:X) are also starting the morning sharply lower before the opening bell at the New York Stock Exchange. Other leading commodity stocks will be in play today as well.
Traders should keep a close eye on the U.S. Dollar Index. Should the U.S. Dollar Index decline or pullback after the opening bell at 9:30 EST the commodity stocks could bounce or trade off of the pre-market lows. Remember when the dollar declines the stock markets inflate and usually trade higher. Traders that want to play the U.S. Dollar Index can use or follow the PowerShares DB US Dollar Index Bullish(NYSE:UUP).
Oil remains very strong today as the problems in Libya and the rest of the Middle East seem to expand by the minute. Anytime the oil producing nations in the Middle East face the chance of disruption this will effect the markets. Traders and investors must ask themselves what country is next to stage a protest and possible revolution. The popular United States Oil Fund(NYSE:USO) is trading above $39.13 a share after closing at $36.36 on February 18, 2011.
Gold and silver are rallying higher this morning as fear is striking the markets worldwide. These precious metals can be viewed as a form of currency against the fiat money systems used by the central banks. Silver made a 31 year high yesterday by briefly reaching the $34.00 level. Gold has not yet made new all time highs. The high for gold was made on December 7, 2011 at $1432.50 an ounce. Traders and investors can watch the SPDR Gold Shares(NYSE:GLD) and the iShares Silver Trust(NYSE:SLV) to be in play throughout the trading session today.
The S&P 500 Index futures(ES-H1) are trading lower by 15.50 to 1327.00. The Nasdaq 100 futures(NQ H1) is trading lower by 34.00 to 2361.00. Recently, the stock market has been in a sharp rally as every dip has been bought. We shall see if that buying trend by the large institutions continues today.
Nicholas Santiago
InTheMoneyStocks.com
