Talking Points:
• S&P 500 ends its longest bull run (above 200-day SMA) in 16 years and is suffering the loss of confidence
• The capitulation of this complacency stalwart, however, didn't leverage risk aversion market wide
• If speculative appetite isn't all consuming, currencies like the Dollar and Pound will account for rates
See the DailyFX Analysts' forecasts for the Dollar, Euro, Pound and Gold through the 4Q on our DailyFX Trading Guides page.
For years, US equity indexes were the diehard holdouts to risk aversion swoons. A tumble from the S&P 500 this morning ended the most persistent bull trend for the benchmark since 1998 and warned investors that the shift in sentiment could become disorderly if provoked. Yet, the occasion of this bastion of bullishness collapsing didn't seem to signal a definitive turning point for the rest of the financial system. Volatility measures for other asset classes, selling on Yen crosses and appetite for the Dollar as a liquidity haven represent the next tiers of risk aversion. As the market remains transfixed on the ebb and flow of sentiment; scheduled event risk such as 3Q US earnings, UK inflation and Eurozone investor sentiment data will influence price action. We discuss these important and conflicting themes in today's Trading Video.
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