A historic level of volatility overnight left everything sharply...

A historic level of volatility overnight left everything sharply lower. Never seen anything like the performance on Wall Street as support levels failed to halt the rout. The October 2014 correction took the SPX down to a low of 1820 before it started a rally with no corrections all the way back up to 2071. No one was worried then when the SPX had this amazing rise with just a few down days. The SPX has nearly retraced that whole rise in almost a mirror image but with no corrections at all on the way down. Almost as though the market had to go back to that level and start all over again.

But it wasn’t only shares that were dumped – commodities were also severely caned. Gold tried again to break its downtrend but at the end of the session it was back sitting right on this trendline – very disappointing. As I said yesterday, if gold can’t go up in this environment, then what does it need. US dollar weakness saw the Swissy and Euro the main beneficiaries but the poor little Aussie dollar, together with the Canadian dollar and Kiwi dollar, were all thrashed.

Australia has already exceeded the low of 2014 finishing yesterday right on 5000 but that will be broken on the open. With all our key commodities lower overnight the selling is likely to be savage again. However, to be realistic, after such a fall, we should start to expect some buying to start to appear.

Another serious break on the iron ore chart.