This morning, the S&P 500 Index e-mini futures (ES-U2) are trading lower by 1.00 point to 1401.50 per contract. Often, the start of the trading week will be somewhat on the light side when it comes to trading volume and volatility. The markets should pick up in activity as the week goes on, this Friday will be options expiration. During the trading week leading up to options expiration the large institutions will usually play a lot of games with the popular stocks. Leading stocks such as Green Mountain Coffee Roasters Inc (NASDAQ:GMCR), Netflix Inc (NASDAQ:NFLX), and First Solar Inc (NASDAQ:FSLR), are just a few that will usually be very volatile this week.
Last night, the important Shanghai Index (China) finished the trading session lower by 1.50 percent. China is still considered the growth engine of the world, however, its stock market is telling us differently. If the U.S. markets are weak today this tells us that the Chinese ADR’s could be vulnerable to declines. On the flip side, if the U.S. markets are strong today then the Chinese ADR’s are likely to hold up. Traders should keep a close eye on the iShares FTSE/Xinhua China 25 Index (ETF) (NYSEARCA:FXI) to see how the majority of the Chinese ADR’s are trading.