Dismal risk sentiment across global financial markets may subsequently lead to even further declines in the Dow and rallies in the Japanese Yen; we likewise note that the S&P 500 Volatility Index recently reached its highest levels on record. There seems to be relatively little in the way of further equity market declines. Until we see traders willing to buy into recently breathtaking market losses, a continued panic could continue leading the Dow and other US indices lower. In fact, the Dow Jones Industrials have now lost for the seventh consecutive day of trade—the first such occurrence since July, 2002. It was at that moment in 2002 that the Dow momentarily bounced and subsequently plunged below 8,000 in a matter of days.
Written by David Rodríguez, Quantitative Analyst for DailyFX.com
To contact the author of this report, e-mail drodriguez@dailyfx.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
