The S&P/ASX 200 crashed on the open and is down over 2% at midday, or a total of 96 points at 4337, wiping out 12 months worth of gains, and back down to the pre-QE2 low of August 2010.
Other Asian markets are experiencing similar losses, with the Nikkei 225 down 2.17% at 9631 points, and the Hang Seng down 2.3% at 21905 points.
Other risk assets are generally down, with the AUD slammed because of the RBA rate hold and the run to the USD, now at 1.069 against the USD. Gold shot ahead to a new record high overnight, but has come back slightly in Asian trade, now at $1657 USD an ounce. WTI crude is also down to $93.26 USD per barrel.
Movers and Shakers
It’s deep red across the board, with all sectors losing, with only 4 stocks amongst the top 200 actually rising. The banks are all down 2-3%, with the millionaire factory Macquarie down over 5%
The resource twins BHP and RIO have also broken down, losing 3% and 2.5% respectively, whilst my preferred offspring – Cochlear (COH) and CSL – are down 1.7% and 2.5% respectively, even on the back of the weaker AUD.
Daily Chart
Todays title comes from a favourite film of mine – Lord of War – and indeed there is a bath of blood on the ASX today, over 100 points below critical support at 4450 points.
Daily chart of ASX200
That wipes out all of FY2010 gains, and the market is down 8.5% for calendar year 2011. The next support level is ca. 4200 points, not that far away, and the index is likely to oscillate around that level as earnings come in over the next month.
Some companies are likely to surprise (although I doubt retail won’t) and give destitute bulls a reason to bid up prices, but as the Aussie market takes its lead (and in fact, as been leading since the start of the year) from overseas – read the US and EU – only a new round of QE/stimulus/rates cut are likely to have any lasting effect.
I contend that the new resistance level/zone for the Aussie market is now 4500 to 4600 points. The weekly chart below shows how the old support level of 4600 points (the red horizontal line) has now become significant resistance.
This is a time to keep your powder dry, not to try to catch falling knives.
Weekly chart of ASX200
Local earnings season is upon us – remember to watch all the updates here.