US markets last night yet again followed Nikkei/JPY leads - almost a carbon copy of Nikkei - run up to resistance, failed and back down to close near lows/support.
With Nikkei at August lows, after last night performance its pretty clear its new lows coming Monday - so you would expect US will follow to new lows Monday night - especially as its had 4 goes so far at breaking 13050ish support despite RSI/MACD generally rising during that period.
Based on the size of the initial falls and the bounces, on an extension basis, looks like a fall down to SP500 1400ish to me on Monday night.
Seems to me that with Financials short term overssold US wont get any bounce from Financials short term recovery as all thats happening now is rotation by fundies out of other sectors - eg technology. The selloff in NASDAQ I think finally shows the realisation that - as many of the NASDAQ stocks are driven by global growth - we have not only a US recession but potentially a global recession or at minimum a very decent pullback in global GDP. IMO how could it be otherwise with both US and Japan growth dwindling away.
We now have AUD/USD clinging grimly just below/outside its uptrend line from the August lows and I personally think this will break Monday which will bring a decent fall in AUD/USD and consequently at that point I'm guessing we'll see XAO/XJO come to the realisation it needs to pullback a bit more severely.
PS: cwliew - sorry to hear about your RIO shorts - however - IMO - could be wrong - RIO will fill its gap fairly soon so maybe premature to have closed your shorts - looks to me like a big blowoff spike - and farsight's suggestion of this beng some sort of prop announcement could be right. BHP certainly has much more downside to come so at 3:1 ratio means RIO should come off also in the absence of any further interest in RIO - IMO unlikely.
PPS: thanks wandarra for compliment - hope it may have helped people to position themselves or react quickly when the JPY broke out last night and gave a clear short signal before the futures began moving. Always think its worth keeping close eye on currencies, metals movements, other indices as leading indicators
Always happy to hear from anybody who disagrees with me - all just my thoughts
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