The bounce continues although its only a half inflated ball, with Japanese shares lagging and US futures slipping going into tonight’s session. This has all the hallmarks of a dead cat bounce and it must remembered that previous serious market corrections had big swings that were mistaken for recoveries. Gold is still struggling under $1600USD per ounce while the Aussie dollar moved marginally higher on the RBA’s cut this afternoon.
The Shanghai Composite is trying to get back above 3000 points, currently up nearly 1% after the lunch break to 2995 points while the Hang Seng Index is putting in a scratch session to be at 26279 points, gapping higher on the open but unable to hold on to these gains:
Japanese share markets took back all of yesterday’s bounce and then some as Yen buying dominated with the Nikkei 225 losing just over 1% to 21082 points. The USDJPY pair is the real proxy to watch as it remains unable to get back above the 108.40 level and remains stuck at the previous January lows:
The ASX200 gapped more than 1% higher on the open but slowly gave back some gains going into the afternoon, closing 0.7% higher at 6435 points. The RBA cut rates this afternnon, shooting its third to last bullet in the process, sending the depressed Australian dollar slightly higher to the mid 65 level, but not yet making a new session high. Still, this has the setup for a swing trade higher back up to the 66 handle at least:
Eurostoxx and S&P futures are flatlining here going into the European session, with the four hourly chart of the S&P500 showing an attempt to get back above ATR resistance at the 3080 point level, having breached and stayed above the previous psychologically important 3000 point level overnight – still smells dead cat to me:
The economic calendar includes the EZ wide CPI print for February plus a few US Federal Reserve member speeches, but a possible market moving event is the Super Tuesday Democratic primaries.