Shanghai Stock Market First... Are we Next?
Stock-Markets / Stock Markets 2016 Feb 25, 2016 - 02:33 PM GMT
Good Morning!
Yesterday’s call that the Shanghai Index had topped must have been prescient. Overnight it dropped 187.65, or 6.41%. This puts the index just above a potential Cup with Handle formation whose target exceeds the Head & Shoulders formation target.
ZeroHedge reports, “After a burst of volatility in the developed market over the past month, one odd outlier was China, where after a surge of gut-wrenching moves in both its currency and equity markets (recall that it was China's troubles with marketwide circuit breakers at the start of January that may have catalyzed the global volatility wave), Chinese stocks remained relatively quiet and resilient, levitating quietly day after day. That all changed overnight when the Shanghai Composite plunged by 6.4% with the drop accelerating into the close. This was the biggest drop in over a month and was big enough to almost wipe out the entire 10% rebound from the January lows in one session.”
The EuroStoxx 50 and the Nikkei both rallied overnight, but don’t believe that there won’t be any consequences from the Shanghai decline. Euronext has already declared a suspension of trading this morning.
SPX futures made two attempts at driving the market higher in overnight trading. However, the Premarket is flat at this time.
The NYSE also broke at 7:00 am allowing the algos to push the markets higher for a while. However, that did not last.
Initial jobless claims fell to 42-year lows, but one wonders how much of that was seasonal adjustments?
TNX is flat this morning, as is the SPX.
One wonders what surprises await us at the open?
Regards,
Tony
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