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Heavy Event Risk Next Weeks Meets a Surprisingly Volatile Market

Heavy Event Risk Next Weeks Meets a Surprisingly Volatile Market

2014-12-13 00:19:00
John Kicklighter, Chief Strategist
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Talking Points:

• Losses for 'risk sensitive' markets accelerated through the end of the week

• How much can a heavy economic docket can fight the onset of the year-end liquidity drain?

• Top event risk is the FOMC rate decision - a clear driver for the USD but perhaps risk as well

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A continued climb in volatility alongside sharp market adjustments is fighting the dusk of the year-end liquidity drain. This past week, the S&P 500 suffered its worst weekly slump in two-and-a-half years; and many other speculative-sensitive assets were pulled down with it. Is this the beginning of a uniform, fundamentally-derived momentum? Or is it the natural - if abrupt - adjustment we would expect with investors balancing their books before holiday trading conditions? Left to their own devices, traders would likely level off as volume and open interest ebbed. However, there is a heavy round of motivation to keep the markets moving in scheduled event risk. The pinnacle of the flow will be the Fed's rate decision which will futher offer updated forecasts and Chairwoman Yellen's sentiments. We take the market's temperature and weigh its tradability next week in the weekend Trading Video.

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