Asian stocks are a sea of red, the Shanghai Composite is trapping bulls no wrong side of the market

• Asian stocks are flashing red, possibly due to overnight losses in the US stocks.
• The Shanghai Composite is down 1.6 percent, despite having witnessed an ascending channel breakout yesterday.

The risk aversion seen in the US stocks has hit the Asian shores.

As of writing, the major Asian indices are a sea of red. For instance, Japan's Nikkei is down 1.13 percent and South Korea's Kospi has shed 1.07 percent. Elsewhere, the Shanghai Composite is reporting a 1.6 percent drop and Hong Kong's Hang Seng is down almost 2 percent.

Notably, the Shanghai Composite, which closed at 2703 yesterday confirming an ascending triangle breakout, has neutralized the immediate bullish setup with a move back inside the channel.

The Asian equities are likely taking cues from the overnight losses on Wall Street. US stocks nosedived on Monday, with Nasdaq falling 3 percent, as investors dumped Apple, internet and other technology shares. The renewed US-China trade tensions also added the bearish tone around the US stocks.

The risk-off tone in Asia, however, isn't helping the anti-risk Japanese yen. This is evident from USD/JPY's failure to beat the 61.8 percent Fibonacci retracement of 112.47.