Glencore's fall kicks off a bad session across Europe and the US, ASX futures down 104 points

The ASX will open at the bottom of its range today, thanks to falls of up to 3% in the US and Europe. As stated yesterday, it is fruitless for investors to search for fundamental economic reasons to explain market positioning at present, so I do firmly encourage that those who are looking to make sense of short-term movement click here to take up a Rivkin Global membership. Rivkin Global members, who can take positions that benefit from falling markets, are sitting on a 6% open profit on a short NASDAQ position, which led the falls on major global equity indices last night. US tech stocks have been exponential in their rise since the GFC recovery and thus when risk is removed from markets, stocks listed on this index are among the first to be cut down to size due to their extreme valuations.

In today's first chart I've updated the ASX 200 cash index futures market from the Rivkin Trader platform, which continues to show the 5,000 level holding up for the time being. Today's second chart shows the NASDAQ 100 index taking a step back from its stratospheric rise over the last six years.

Today's last chart shows Glencore PLC (GLEN) in orange falling significantly over the past six months, with selling intensifying last night. The market is concerned that the uncertainty of future commodity prices isn't being addressed at an appropriate pace in the context of GLEN's debt, with CEO Ivan Glasenberg announcing the debt reduction plan just three weeks ago. GLEN fell from GBP 97.22 to 68.62 last night, a 29.4% drop which shaved billions from its market cap. I have also plotted (in black) the CRB ETF, which tracks the CRB commodity index, and shows that while GLEN followed the trend in commodity markets closely up until August, it has now taken on a new trend of its own that is tied to its balance sheet dynamics.

ASX futures have witnessed a fairly deep turnaround, given the positive run we had during yesterday's day session - in the context of yesterday's 71 point rise, we're only down 33 points since Friday's close based on the overnight futures price. So the reaction on Australian markets doesn't look to be too extreme at all - let's see whether we hold the 5,000 level today.

Source: Rivkin, Saxo Bank

To view the Rivkin economic calendar and Global Markets matrix, members can click here.

This article was written by Scott Schuberg, CEO of Rivkin Securities Pty Ltd. Enquiries can be made via or by phoning +612 8302 3600.

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