The dead cats are piling up faster than a PETA shelter can shovel them with equity markets in Asia in reversal mode in what has been a quiet day in terms of economic and geopolitical catalysts. This is mainly due to the lack of a rebound on Wall Street overnight, and the surge in USD strength and the selloff in US Treasuries with a flow on to emerging markets.
The Shanghai Composite fell slightly before the long lunch break but has returned thereafter to sell off swiftly, closing 2.4% lower to 2589 points, getting back below key support at the 2600 level. The Hang Seng Index is up by 2.7% lower to 25451 points, also retreating below previous support level at 26000 points negating in a flash the previous bullish engulfing candle on the daily chart:
S&P and Eurostoxx futures are down considerably with the four hourly S&P 500 chart showing a potential break of key support that has held for the last two weeks since the correction started:
Japanese stocks have also cratered, with a small run to Yen helping, the Nikkei 225 closing 2.7% lower at 22010 points. The USDJPY pair is retracing in what looks like a false breakout above resistance at the 112.60 level, now falling back to the low moving average on the four hourly chart with momentum almost twitching to the negative side:
The ASX200 has remained under pressure throughout the dead cat bounces, so it’s no surprise it fell the least, off by only 1% to 5843 points, with psychological resistance at 6000 points a distant memory. The Aussie dollar however is fading fast, with an accelerated selloff to the almost reach my target at 70.50, with the previous two weekly low not far away:
The economic calendar is sparse again tonight with some EZ consumer confidence numbers and a speech by BOE Governor Carney the only events of note.