\n\t\t\tMax Ludowici<\/span> of 708 Capital is visiting clients today and as such is unable to produce his regular report. <\/em><\/p>\n

\n\t\t\tBy Greg Peel<\/p>\n

\n\t\t\tWell nobody saw that coming.<\/p>\n

\n\t\t\tAfter a non-event, holiday-affected session on Wall Street and no movement in SPI<\/span> futures overnight, a quick poll of protagonists this morning would not have rendered anything close to predictions of a 59 point (1.3%) fall in the ASX<\/span> 200 to 4390. So what on earth just happened?<\/p>\n

\n\t\t\tAsk five broker\/analysts and you'll get five different responses. The usual suspects are there — worries about the US fiscal cliff and worries about Europe (specifically the Greek bail-out tranche<\/span>). That's what you'll hear on the nightly news tonight. However the Australian market has had a few sessions now in which to respond to the fiscal cliff and to date movements have not bee pronounced as in the US, and in the US there is a growing feeling some compromise might just be reached. As for Greece, EU officials have been saying for a while now that a decision on the Greek bail-out tranche<\/span> will not be immediately forthcoming, so any fear over Greece is hardly "new news".<\/p>\n

\n\t\t\tNAB is release a shocker of a business conditions and confidence survey this morning (See Oz Business Conditions Worst In Three Years<\/a>) which can realistically be assumed to have added to weakness, but not realistically assumed to have been worth 1.3%.<\/p>\n

\n\t\t\tQBE<\/span> Insurance ((QBE<\/span>)) was slapped another 7% today after a trashing yesterday as analysts warned investors away from the stock (See Brokers Cautious On QBE<\/span><\/a>) but one swallow does not a summer make. Indeed, Incitec<\/span> Pivot ((IPL<\/span>)) bucked the trend and bounced 4% today following a surprisingly positive profit result, if we're looking at single stocks.<\/p>\n

\n\t\t\tOne might argue that the 1.3% fall represents a sort of delayed reaction, build up of negativity, which became a slippery slope. The market opened only slightly weaker but took a turn for the worst mid-morning and just never looked back. Bridge Street has underperformed<\/span> Wall Street all year but has actually outperformed recently and did not fall as much last week on the election response. Is this just a necessary adjustment? A bit of a capitulation shake-out?<\/p>\n

\n\t\t\tThe answer may be even simpler. The best explanation I've heard — albeit Chinese whispered — is that a big Asian portfolio sell order hit the market today and met a degree of nervousness and not a lot of volume support. So down we went, without much resistance. These things happen every now and again, from the US or elsewhere or even sourced locally. And when they do they often take out technical levels, which in turn wakes up computers and begets more selling, and hence we see snowballing. A couple of technical levels were taken out today.<\/p>\n

\n\t\t\tA look at the screens also shows the euro down 0.2% since this morning and Dow futures down 70 points right now. The two usually go hand in hand. The bottom line is there's not a lot to feel positive about right now, even though good news could jump out at us at any point (cliff, Spain). In the interim, limbo period, down is easier than up.
\n\t\t\t <\/p>\n

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