Daily Video Analysis: U.S. Markets are Decimated Overnight

Good morning this is your daily video analysis for Wednesday October 8.

U.S. markets were routed overnight as concerns over Europe’s economic slowdown are rattling investors, There is also corporate third quarter growth concerns. The Dow Jones lost over 270 points, The S&P 500 fell nearly 30 points to an 8 week low and the tech heavy Nasdaq Composite dropped nearly 70 points.
Let’s look at today’s economic calendar. This morning China released its HSBC services PMI. It missed expectations and came in at 53.50.

At 0500 GMT Japan will release a whole slew of data. The most interesting of the lot will be the Bank of Japan Economic survey. We will get the lay of the land with economic sentiment and attitudes towards growth and recovery. The most important market mover comes out of the United States at 1800 GMT. The Federal Reserve will release the minutes of last month’s FOMC meeting. We will be looking or opinions and wording concerning normalization of policy to see when they will raise rates.

Let’s look at some technical analysis.

First off is the Dow Jones Industrial Average (DJIA). The market closed at 16,719.39. We fell below the technical level of 16,750. If we do not recover then we will challenge 16,500. A close below that would be bad as it opens the doors for 16,000. Valuations were stretched quite a bit. This selloff should not be a shocker. A fall below 16,000 is unlikely.
Next I want to look at the GBP/JPY. The Sterling has fallen below 174 and now at a three week low. If we close below 173.67, the doors open up to challenge 172.05. A defend here needs a close above 175.05 to indicate a short term bottom in place and shift in sentiment.

Lastly, I want to discuss Gold. The yellow metal seems to have found a bottom. We are near a technical level of 1220. I break higher from here challenges 1235.