The S&P/ASX 200 Index closed down 102 points or 2.4% lower to 4244 points today, reacting to Italian bond dramas overnight. In after hours trading, the index has fallen another 10 points, with Euro and US markets are pointing to slightly lower opens.
Asian markets had a bad day, with Japan’s Nikkei 225 down nearly 3% to 8500 points, the Hang Seng losing 4.2% at 19166 and the Shanghai Composite currently down 1.2% to 2493 points.
In other risk assets, the AUD slipped 0.2% to 1.012 against the USD whilst WTI crude was steady, now at $95.68 USD a barrel.
Gold lost almost 2% during the Asian session after falling in the NYMEX session overnight and is currently at $1762 USD an ounce or $1740 AUD an ounce.
Movers and Shakers
A scarlet red day on the board of the ASX, with all sectors getting slammed, financials losing 3.3%, materials 2.6% amongst the worst.
The banks were all hit hard, with ANZ down 5.7% – but it did go ex-dividend today, Commonwealth (CBA) down 2.26%, National Australia Bank (NAB) losing nearly 5% whilst Westpac (WBC) lost 3.25%
Macquarie (MQG) actually outperformed its retail bank “peers”, and only lost 1.9%, whilst healthcare stalwart Cochlear (COH) slipped 0.4% Its “twin” CSL was a standout, gaining 0.6% whilst Telstra (TLS) lost 0.6%
BHP Billiton (BHP) was sold off by 2%, whilst Rio Tinto (RIO) lost 2.6%, gold miner Newcrest Mining (NCM) down 1.2%, Fortescue (FMG) going back to its heavy rock metal day trading volatility – down 8% and Woodside Petroleum (WPL) losing 2.6%
Woolworths (WOW) lost 1.25%, whilst somewhat competitor (through its ailing Dick Smith Electronics stores) JB Hi-Fi (JBH) continued to rally up over two percent above $16 per share.
The Charts
So does today’s action abrograte the case I made yesterday that “by breaking through the 4300 point resistance level has confirmed an intermediate uptrend”?
Possibly, which is the copout, but the reality of investing and trading – nobody knows, and I don’t pretend to foretell or predict the future, I just give a range of probabilities.
Note on the lines I placed on the chart yesterday (but with today’s data), that we could have a retracement back to the channel line, around 4200 before bouncing up to the 4200 level:
The weekly chart below shows the current market weakness, as it slides closer back to the downtrend line:
I continue to caution that this is a typical bear market rally that has a low probability of morphing into a cyclical bull market. Tread carefully and assign your asset allocation based on the risks.
Watch my “Chart of the Day” posts for continued analysis of US, Euro and Asian markets which will lead the way.