Trading Day

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The S&P/ASX 200 closed sharply down today, after yesterday’s poor performance and reaction to overnight markets. The index is down 65 points or 1.5% to 4242 points. In after hours trading, the market is at 4230 points as we wait for US employment figures early Saturday morning (AEST).

Asian markets experienced similar losses, with the Nikkei 225 losing 1.2% to 8950 points whilst the Hang Seng closed down 1.4% to 20293 points.

In other risk assets, the AUD is steady above 1.07 against the USD, whilst WTI crude slipped slightly to just below $89 USD per barrel. Gold has steadied and stands at $1834 USD an ounce.

Movers and Shakers
It’s red across the board on the ASX, with less than 10 stocks out of 200 actually up for the day – Rock Oil (ROC) the standout up 3% and Qantas (QAN) up 2%. For the rest its bad news.

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Overall the banks lost between 1 and 1.7%, ANZ the biggest loser, with WBC the “winner”. Suncorp (SUN) also fell 1% whilst Macquarie (MQG) retraced sharply, falling over 3.5%

BHP Billiton (BHP) was a big drag (sic) falling 2%, whilst RIO did better only down 1.4%.

The Charts
Well here we are again – a failure to breach a local resistance point, this time 4300 points – the high reached during the rebound rally from the epic correction of early August. I don’t use candlestick analysis much, but yesterdays bearish candle – called a shooting star – was a precursor to todays sharp retracement.

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If we see continued bearish action on EU/US markets tonight, it is likely this retracement target will be 4100 points in the short term, wiping out the meagre gains of the last two weeks.

Again, the weekly chart is revealing.

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Strong selling is weighing upon the market, as seen by the long upper tail in this week’s candle. It too is technically a shooting star, and although the pattern is unreliable (as most are), the medium term and long trend is undeniable.