President Obama warned Wall Street to be worried yesterday and in one of the silliest bits of advice given by a President in ages Wall Street did exactly as it was told and got worried and sold off. It was also more bad news as the Government Shutdown drags on and consumer confidence collapses, the services sectors rate of growth slows and the stock market sell off gains pace. At the close the Dow fall 137 points or 0.91%, the Nasdaq lost 1.08% and the S&P had a good bounce from seriously acute weakness with a low of 1670 but still closed down 15 points or 0.88%.
For those who are technically minded lets have a look at the S&P 500 nearing important support from my Vantage FX trading platform.
The dotted trendline is very solid support and the S&P 500 has bounced off it 3 times over the past 12 months. We always respect such lines unless or until they break and with a lot of the excess momentum washed out of the S&P since the highs that remains the case now. But the level is clear on the dailies and we are watching.
On the data front initial jobless claims were released and showed a small increase of 1000 to 308,000 but the good news is this is low by recent standards, ISM non-manufacturing was positive but a big miss at 54.4 versus 57.4 expected and 58.6 last.
In Europe the FTSE managed to rally 0.18% but there was weakness across Continental Europe with the DAX down 0.36%, the CAC fell 0.73% while stocks in Milan and Madrid were 0.44% and 0.58% lower.
Closer to home on the Sydney Futures Exchange the SPI 200 contract fell 30 points overnight to important support at 5200.
You can see that the SPI 200 is right on my slow moving average and if the lows for this week get taken out then It is good night Irene for the local market. As highlighted last week 1580 is important short term as well and then below there 5144. If that gives way then we could even see a run down toward 5000/5050.
On Forex markets the US dollar was under more pressure with the Euro rising 0.32% to 1.3619 but its off a little from the high of 1.3645. GBP lost 0.39% to 1.6157, USDJPY was unchanged at 97.29 but the Aussie dollar was a bit higher at 0.9396.
Looking at the Aussie dollar technicals it looks like a bit of weakness could evolve within the current box if 0.9383 gives way today.
On commodities gold fell back to $1316 oz., crude dropped 1.17% to $102.88, copper lost 5 cents to $3.27 lb, Corn was flat, wheat rose 0.29% and Soybeans rose 1.12%.
The US Government shutdown means that we won’t get non-farm payrolls tonight and it is otherwise a fairly quiet data day with the BoJ decision the only major item.
Have a great day and good hunting