Markets don’t like uncertainty and the US debt issue is providing the fuel for uncertainty it seems. Selling has been building over the last few days in the US and accelerated overnight, pretty much from the open to the close. The Dow Jones and Nasdaq closed 1.6 and 2.6% lower respectively, whilst the S&P500 split the two at 2% lower. This was never going to be positive for our market which gapped down on open to lose most ground in early trade, becoming range-bound throughout the afternoon. Closing 1.6% lower, the XJO ended the day down 73.6 points with selling evident across the board. It was enough to trigger some short setups and trigger all but one stop on long positions. Support built from lows in June and July is now under threat and it may be prudent to await a break before initiating too many more short positions. There is certainly nothing wrong with laying low until a resolution is reached in the US. Futures there are up about a third of a percent at the time of writing.

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