The current Global Market selloff started for a host of reasons, including concerns about the Federal Reserve interest rate actions, China’s weakening economy and currency action, combined with other economic indicators. While Friday, August 21, 2015 was a remarkable down day marked by the breach of a giant S&P500 wedge pattern breaking, the wave of selling has set about circumventing the globe.
Normall dull Sunday futures trading was replaced with extraordiary selling for this early glimpse into trading. As of this writing, the $ES_F was already down 35 handles.
The wave of global selling pressure continues. $ES_F drops 35 handles in Sunday futures trading. Seatbelt Monday!pic.twitter.com/SkvPP3sn92
In China, the Shanghai Comp dumped 7.8% and has removed yearly gains.
UPDATE: Shanghai Comp. briefly falls more than 7.8%, erasing its year-to-date gains; index now down 7.5% intraday.http://cnb.cx/1JKYtr8
and more on the subject here:
China shares wipe out all gains this year http://on.wsj.com/1LrJwYG pic.twitter.com/gh0YkPlZI6
The Chinese government seems to be taking action by releasing a flood of cash to combat the problem.
China to flood economy with cash, as global markets lose faith http://on.wsj.com/1V3nEHx pic.twitter.com/408FEoC0Hc
So, what does this mean for Monday trading. For me it is simple. Do what the charts are telling me, don’t come into the day with any preconceived ideas, and avoid falling knives at all costs.
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