It’s not looking good out there with volatility rising and stocks falling across the board in response to Friday nights US unemployment print and the weekend revelations of the Huawei arrest (and Trump’s possible impending arrest?) and the big drop in US Treasury yields as safe haven buying trumps a Santa Claus rally.
The Shanghai Composite was actually one of the better performers, down only 0.8% to 2584 points, but no longer able to hang on above the previous support level at 2600 points. The Hang Seng Index has retreated even further, down 1.3% to 25718 points, still well below the previous support level and the low moving average on the daily chart:
US and Eurostoxx futures are down over 1% going into the London open, with the daily S&P 500 futures chart showing a definite downtrend and series of lower daily lows that are going to culminate in a capitulation soon:
Japanese stocks were hit the hardest as Yen buyers stepped in on a big gap down, the Nikkei 225 closing 2.1% lower to 21219 points, making a new weekly low. The USDJPY pair came back slightly on the gap down and while there is a tentative bullish falling wedge pattern forming here on the four hourly chart its very early days, where I’m looking for a nother break below the 112 handle:
The ASX200 also joined in on the selloff, banks contributing most of the carnage, finishing 2.2% lower to 5552 points, previous support at 5700 points a distant memory. The Aussie dollar gapped lower but came back slightly, still staying depressed and, hovering around the low moving average on the four hourly chart, getting just above the 72 handle but for how long?
The economic calendar starts the week fairly quietly as usual following the NFP with some Treasury auctions tonight.