Archived IMT (2009.08.17)

The main difference between equity losses originating in US markets and those originating in Asia is that the latter have tended to dissipate during the subsequent US session, especially in the case of improved US data. This time around, the sell-off originated in US Friday, which later added to existing damage in China and triggered profit-taking in Tokyo. But the deteriorating sell-off in Shanghai Composite has now led to a 17% decline off the August highs in a matter of 2 weeks, which may qualify as more than just a correction. The fallout of the global selloff has been exasperated by the intensifying declines in the crude oil, which is at risk of testing a key support of $66.00. USDX faces trend line resistance at 79.75 along with the 55-day MA at 79.50. Gold readies to post its 2nd weekly decline (first in 5 weeks) testing $930 TL support extending from the June low, also coinciding with the 100-day MA at 927.