Holiday Market Mode Is Upon Us

This morning, the S&P 500 Index e-mini futures (ES-U2) are trading higher by 1.50 points to 1409.25 per contract. Many traders and investors are waiting to hear the Ben Bernanke speech on Friday morning from Jackson Hole, Wyoming. Will the central banker of the world announce another quantitative easing or easy money stimulus program?

Well, that is the hope by the large institutional traders at least. In the meantime, oil, and gasoline prices have surged higher recently and it is not because of the hurricane in the Gulf of Mexico. Inflation in energy and food has rallied because the U.S. Dollar Index has been selling off, and a weaker U.S. dollar causes inflation around the world. In any case, the markets are trading higher today and that is the bottom line at this time.

Last night, the important and highly followed Shanghai Index (China) finished lower by 0.96 percent. This is another fresh new three year low for the Chinese stock market. While many traders await the People's Bank of China (Chinese central bank) to add more stimulus to their system they have not yet acted. Believe it or not, the longer the Chinese wait before acting on another monetary easing program, the better off they will ultimately be. You see, recessions are good, they purge the system of excess supply and are healthy.

Perhaps the United States could learn something from the Chinese who look as if they are not ready to repeat their errors from the past. In any case, the Chinese ADR's could be under pressure today if the U.S. markets are weak. Leading Chinese equities such as the iShares FTSE/Xinhua China 25 Index (ETF) (NYSEARCA:FXI), China Mobile Ltd. (ADR) (NYSE:CHL), SINA Corp (NASDAQ:SINA), and Sohu.com Inc (NASDAQ:SOHU) could all be volatile and in play. If the U.S. markets are strong today the Chinese ADR's will likely hold up fine.

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