The S&P/ASX 200 Index reversed Friday’s gains and closed down 1.6% or 68 points to 4081, possibly on reaction to President Obama’s deficit cuts and tax hike plan. In after hours trading, the market is steady whilst the Euro and US futures point to similar losses.
Asian markets experienced similar moves, although the Nikkei 225 was closed, the futures are pointing to a 1% loss around 8765 points, whilst the Hang Seng was down 2.6% at 18943 points.
In other risk assets, the AUD slumped over 1 cent to 1.0248, whilst WTI crude fell 1.5% to $86.61 USD per barrel.
Gold has rebounded from a minor correction and is now above support at $1826 USD an ounce.
Movers and Shakers
A red day across the board on the ASX, with energy and IT sectors the biggest losers, only telco steady. The banks were all sold off between 1.4% and 2% percent. Macquarie (MQG) slumped 3% whilst Bluescope Steel (BSL) lost over half of its gain on Friday. rose just over 5%. Billabong (BBG) was the biggest loser in the ASX200, down almost 8% for the day.
Cochlear (COH) was the biggest winner, up over 5% rebounding from its correction lows.
BHP Billiton (BHP) lost 1.6% alongside Rio Tinto (RIO) whlist Woodside (WPL) dropped 2.5%
The Charts
I said on Friday – “Commitment to get over the 4100 point level is now here in abundance” – how wrong was that? I should’nt have put hopes in one big day rally and the market finally closing above its 15 day moving average for the first time in 2 weeks. Momentum has stalled in negative territory.
The short term daily pattern is now back to the bottom of a sideways price channel with support at 4000 and resistance at 4300 points. The medium and long term patterns are still bearish and more importantly, Euro and US markets are forming bear reversal patterns with no resolution to either sovereign debt crisis in sight.