The S&P/ASX 200 is steady this afternoon, pausing in the second leg of a correction that began in early April (down over 7% or 300 points). Asian markets are also down, the Nikkei down 0.44%, the Hang Seng 0.45% and Singapore 0.86%. The AUD is up slightly to 1.0562 against the USD, whilst gold is steady at $1493 USD per ounce and WTI oil at $97 USD per barrel.
The lead from overseas markets – where the Dow fell slightly, but the broader S&P500 and NASDAQ fell sharply (1.5% plus) – has not translated into similar falls. However, the drop below the critical 4700 support level means the next target zone is around 4500 points – or a 10% correction from the April highs.
The pattern on the weekly charts remains similar to the May 2010 correction. A double top formation after hitting resistance at 5000 points – any further weakness of overseas markets could see an overshoot of the correction to 4200 points.