U.S. Markets Extend Losses

Asian markets started this week on choppy, mixed trading after the U.S. markets closed down on Friday and Japan’s trade deficit was wider than expected.

U.S. Markets were largely to blame for today’s jitters in Asia. Markets in the United States extended losses to three straight days as they had their worst week in over a year. U.S. markets have seen two straight weeks of losses now as investors are unhappy with the prospect of the Fed starting its roll back of the bond purchasing program in September.

Economic data out of Japan did not help matters today. The trade deficit came in wider than economists had predicted for the thirteenth straight month. Import costs have been rising as the yen has been strengthening. This result casts a shadow on Shinzo Abe’s “Abenomics.” It does take a year between currency depreciation and how it will effect exports and imports. While the yen has weakened greatly over the last year, the recent spike has not been helpful.

STOCKS
The Nikkei 225 saw erratic, choppy trade most of the day but closed up 0.2 percent. The Shanghai Composite added 0.3 percent. The Australian S&P/ASX fell heavily as weak corporate earnings sent stocks into a free fall. Still the index pared back losses, supported heavily by gold mining companies. The benchmark closed up 0.2 percent. The Kospi, in South Korea, was also up 0.3 percent on choppy trade.

U.S. markets were lower Friday and have extended their losing streak to three straight days. The markets have now seen their firs back to back weekly losses since late June with the DJIA losing its biggest weekly loss this year, so far.

The Dow lost 30.72 points to close at 15,081. 47. The NASDAQ lost 3 points to close at 3,602.78 and the S&P 500 lost 5 points to end at 1,655.83. For the week, the DJIA lost over 2 percent, the S&P 500 lost over 2 percent and the tech heavy NASDAQ lost 1.5 percent.

Both the Dow Jones and the S&P have fallen 3 percent from their all-time highs set back on August 2, 2013.

CURRENCIES
The USD/JPY (97.58) now has medium term resistance at 98.35 with support lining up near 95.65. The AUD/USD (0.9213) is looking bullish at this time. We have strong support at 0.9156 and we look to be targeting 0.9300 while above that key support. Please see the below chart.

The EUR/USD (1.3324) is still trading above the key 1.3300 support even though the market fell back from its high at 1.3379 seen on Friday. We seem to be in a range trade from 1.339 to 1.3300 for now. Investors seemed to be waiting on the FOMC meeting next month.

COMMODITIES

Commodity space is mixed right now.

Gold (1380.30) is been rather bullish of late. However, we could see resistance at the current levels that could bring retreat back to 1350.00. The precious metal is up over 17 percent since the end of June. So we could start seeing profit taking.

Copper (3.359) continues its bullish move. This is surprising and nice to see. We can now see a test at 3.40 with a break above targeting 3.45.

TODAY’S OUTLOOK

There is no big economic data slated to be released today. However, there is geopolitical tensions that cold effect the price of oil. There is a violent uprising in Egypt which could see oil transports through the Suez effected this could cause the price of the black gold to go up in the short term.