Its a short sellers paradise out there today in stock land, with a huge co-ordinated selloff – crash if you will – across all Asian markets. And it seems only stocks are really affected, with currency markets relatively sanguine, with the Aussie dollar absorbing the chaos and todays RBA meeting with aplomb. Where will it all end? No one knows, but its well overdue – this correction only takes US stocks back to the October 2016 high, and are still up 20% year on year.
In mainland China the Shanghai Composite has fallen over 3%, gapping right through terminal support at 3400 points, currently at 3380 points. The plunge in the Hang Seng Index was worse, down 4.4% to 30811 points, gapping sharply as it wipes out tentative support at the 32000 point level. Not a nice looking daily chart, but support at 30000 points is coming up shortly:
S&P futures are up slightly after a big fall in early trade with the algo’s possibly stepping in here to fill the gaps.
The next major support level for the S&P500 is a fair way away – around 2200 points or so, as the monthly chart shows, the intersection of previous multi year resistance at 2100 and then above the multi-year post GFC trendline:
Japanese stocks took the biggest hit today, as Yen soared on the safe haven bid. The Nikkei 225 closed down nearly 6% lower to 21377 points, wiping out all of the latter half of last years gains and taking it to weekly support. The USDJPY pair has fallen back to key support at the 108 handle before bouncing slightly, but is likely to be depressed here until the volatility reduces:
The ASX200 not only jumped on the sell train but sped it up, closing 3.3% lower to 5833 points in its worst session in months. The psychological support level at 6000 points was wiped out convincingly and traders will await any bounce on Wall Street before stepping in any time soon. The Aussie dollar continued lower, but without much fuss absorbing the RBA print, currently at the 78.50 level. However going into the City session this is looking tenuous so I’m watching for further falls ahead:
The economic calendar continues with a few minor releases overnight, the US December trade balance the only one of note, then in the wee hours (when Falcon Heavy will launch or RUD – get up early to watch it!) its NZ unemployment.