Morning Report Tuesday 9 June 2015
Last night, the US stock market fell for the third consecutive session, but only closing 2.6% below its all-time high reached in May. Interestingly, the S&P500 has broken beneath the negative ”rising wedge” that I illustrated recently, increasing the potential of a sharp +10% correction in the S&P500. Last night the German DAX closed down over 1.1%, a fall of 10.7% from its all-time highs in April. The point to pick up here is do not underestimate how far markets can move in this increasingly volatile environment.
• I continue to target the 1840 area in the S&P500, over 11% lower – see charts 1 & 2.
The ASX200 has fallen over 8% after last week’s hammering, focused specifically in the bank sector. My ultimate target for the local market is around the 5200 area, around 5-6% lower.
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