Talking Points:
• We witnessed the first concurrent 2-plus percent S&P 500 drop and 30% VIX increase since September 2011
• Risk aversion (fear) is building, and the markets trade differently as each level is reached
• While the Yen crosses and Emerging Markets are highly sensitive, the S&P 500 and EURUSD require depth
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An Emerging Market seizure evolved into a more comprehensive 'risk aversion' move this past week. The biggest weekly drop from the S&P 500 since 2011 complimented a heavy yen cross reversal. Yet, we have not hit full stride for a self-generating bear wave. Whether we are looking for a steady decline in equities and yen crosses, a rebalancing of capital via global deleveraging, or simply the impetus for a dollar charge; the conversation turns to the scale sentiment. We discuss risk trends, a dense list of catalysts (including the FOMC, UK 4Q GDP and Eurozone unemployment), and trade opportunities in the Weekend Trading Video.
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