This morning, the S&P 500 Index e-mini futures (ES H2) are trading slightly lower by 2.25 points to 1336.75 per contract. The small decline in the S&P 500 Index can change on a dime if the U.S. Dollar Index declines. Nearly every trading session the U.S. Dollar Index will decline when the stock market begins trading at 9:30 am EST. In my humble opinion, the markets continue to trade inverse to the U.S. Dollar Index, until that relationship changes the U.S. Dollar Index chart should be followed by every trader and investor at all times. Many investors are waiting for a resolution out of Greece. We shall see if a bailout deal really gets done or if Greece actually leaves the Euro-zone; something has to give eventually.
Last night, the important and highly followed Shanghai Index (China) closed lower by 1.70 percent. This is a large decline for the important Asian stock index. Traders and investors should expect early weakness in many of the leading Chinese ADR’s. If the U.S. markets are weak this group of stocks could be under pressure throughout the day. It is important to note that many of the leading Chinese ADR’s were very weak yesterday so they still remain extremely vulnerable at this time. Stocks such as Baidu Inc (NASDAQ:BIDU), Sina Corp (NASDAQ:SINA), Yoku Inc (NYSE:YOKU), and Sohu.com Inc (NASDAQ:SOHU) are all leading Chinese ADR’s that could be in play today.