Last night, there was more evidence of a slowing Chinese economy. The HSBC flash manufacturing PMI for China declined to 48.1 in March compared to 49.6 in February. Any reading below 50.0 indicates economic contraction. A slowing China is certainly problematic for the global economy. Earlier today, Germany also reported weaker economic data and this is the likely catalyst for the small decline in the markets today before the opening bell. This morning, the S&P 500 Index e-mini futures (ES-M2) are trading lower by 7.00 points to 1390.50 per contract. Traders and investors are now becoming accustomed to buying every morning dip when the futures decline before the opening bell. This buy the dip reaction by traders is much like Pavlov's law, however, one day this trade will no longer work.
Last night, the Asian markets finished mixed. The important Sensex Index (India) finished lower by 2.30 percent. Traders must watch for early weakness in many of the leading Indian ADR's if the U.S. markets remain weak. Leading stocks such as Infosys Ltd ADR (NASDAQ:INFY), Wipro Limited (ADR) (NYSE:WIT), Tata Motors Limited (ADR) (NYSE:TTM), and the The India Fund, Inc. (NYSE:IFN) are all susceptible to early weakness.
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Eventually Buying The Dip Will Not Work
Published 03/22/2012, 11:43 AM
Updated 07/09/2023, 06:31 AM
Eventually Buying The Dip Will Not Work
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Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
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