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Volatility rules... Print
Written by Site admin   
Sunday, 08 March 2020 10:01

It was great to meet so many of you at the London Trader Show last Friday and thanks for your questions during my talk.

Coronavirus dominated of course, as Friday closed with one of the largest points loss of any stock market week, volatility is back with a vengence.

The hit to world trade as China reports another tumble in Manufacturing PMI numbers at 40.3 compared with 51.1 last month, tells the story.

Perhaps, at long last, the markets are now actually looking on bad news as bad. The exact reverse of what has been the case whenever the US Federal Reserve has turned on QE in response to a stock market sneeze.

Confidence, they say, is everything and that's now in short supply as a massive monthly Key reversal candle has kicked off what may become a major market top, taking out the last seven months gains.

trend1

The chart shows trend change levels. Supposing the Dow falls below the upper, then the lower red lines, the long term uptrend  will be turning into a down trend.

The Fed acts

As before, the Fed has just announced, Tuesday evening, they are cutting rates again in response to the crisis. From 1.75% to 1.25%. Will this encourage the bulls to 'buy the dip' and rampage again?

This is how the Dow Jones reacted to the news...

trend2

Unimpressed - so far

 

From the blog

Ripple rolls - over...

That didn't last long, boom busted in 3 days

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