News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Get your snapshot update of the of top level exchanges and key index performance from around the globe here: https://t.co/d8Re5anlG5 https://t.co/rws9LHJV3E
  • RT @FxWestwater: Japanese Yen Forecast: JPY Crosses Eye BoJ, CPI as Haven Flows Bolster Yen Strength Link: https://www.dailyfx.com/forex/fundamental/forecast/weekly/jpy/2021/09/18/Japanese-Yen-Forecast-JPY-Crosses-Eye-BoJ-CPI-as-Haven-Flows-Bolster-Yen-Strength.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https:/…
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/FVisZuTP6M
  • Stocks appear to be in a corrective phase but could get put to the test; levels and lines to watch in the days ahead. Get your weekly equities forecast from @PaulRobinsonFX here: https://t.co/H1BaTlIHjY https://t.co/zP3mjfslSD
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/Of1thU4zXw
  • Further your forex knowledge and gain insights from our expert analysts on AUD with our free guide, available today: https://t.co/p2FhEwym1E https://t.co/MjiYB85TSF
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/fIO9TP7D62
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here: https://t.co/lZFM8youtX https://t.co/Xja8DHUqlH
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/9po5Lg4vnR
  • The Japanese Yen is eyeing the upcoming Bank of Japan rate decision and CPI figures, but JPY crosses will likely remain dependent on broader market sentiment. Get your weekly $JPY forecast from @FxWestwater here: https://t.co/x9rbQpPfWe https://t.co/2x1R5XTVea
Dramatic S&P 500 Breaks Calm Seas, Dollar Has a Very Busy Day Head

Dramatic S&P 500 Breaks Calm Seas, Dollar Has a Very Busy Day Head

John Kicklighter, Chief Strategist

Talking Points:

  • Risk trends took a broad and pointed decline this past session led by the S&P 500's and Dow's gaps lower
  • The Dollar is arguably most at risk between the State of the Union, Fed decision and active risk - but many assets are exposed
  • Bitcoin and cryptocurrency markets risk permanently losing lift as the CFTC investigates Tether and Facebook bans crypto ads

What are the DailyFX analysts' top trading ideas for 2018 and key lessons to take away from 2017? Sign up for both on the DailyFX Trading Guides page.

US Indicies Lead a Sharp Decline

I have been waiting for the market's to make at least a modest move to show its admission that risk trends can sour, but didn't expect the intensity for that correction that we registered this past session. Nearly all assets with a risk sensitivity took a dive through Tuesday's trading session, but none were more remarkable than the benchmark US equity indicies. The S&P 500 which I focused in on the day before posted a high profile trend break. Given the intensity of the bull trend the past month, a break of the channel was overdue, but the resultant move posted the second largest bearish gap on the open in seven years and the 1.1 percent drop ended the longest period of quiet (114 trading days without a 1 percent or greater decline) since 1966. The Dow 30 was just as prominent with its largest gap down on the open since 2001. This could be a dramatic opening salvo to a long-overdue 'de-risking' or simply a pressure relief. Fundamental motivation will determine which category we will fall into.

Please add a description for the image.Dramatic S&P 500 Breaks Calm Seas, Dollar Has a Very Busy Day Head

Fundamental Themes Ahead

There is some heavy scheduled event risk that taps deep and critical themes over the coming 24 hours. Risk trends are an all-consuming theme when under power, but it is more often the powerful result of speculative frustration rather than a catalyst itself. We shouldn't write that off as a possibility however given the extent of exposure the markets have built up over the years and the frequent points of strain pointed out on a regular basis in financial news and trading circles. If we are instead looking for a discreet trigger, the State of the Union can provide a protectionism cue. Clearly, the 'America First' agenda brought to Davos last week was not met with enthusiasm in global sentiment. Doubling down could promote an 'us versus them' growth view that could translate into a collective loss of GDP and reduction in capital circulation.

Dramatic S&P 500 Breaks Calm Seas, Dollar Has a Very Busy Day Head

The FOMC and Other Events/Themes

The third theme that makes this a particularly dangerous time for Dollar volatility but may be difficult for risk assessment is the FOMC rate decision. Unlikely to end in a change in policy, the reality of normalizing policy encouraging the receding tide that shows how exposed to risk the average investor is is always a possibility. Outside the US's circle of influence, the Euro is looking increasingly stretched on its incredible 2017 run founded on a hawkish view that has not really materialized. Will the in-line Eurozone GDP reading (best since before the Great Financial Crisis) enough to earn its buoyancy? Brexit a motivation for Pound bulls draws equal dubiety. Is the outlook really that more encouraging? From the data listing, Aussie traders are watching the Australian CPI figure for the same possible reaction the Kiwi suffered to its own inflation last week - and perhaps a technical cue on similar AUD/USD and NZD/USD channels.

Watch Gold and Crypto

In all the mix of the competing fundamental themes, it is difficult to see what the Dollar and risk trends prioritize and how the outcomes are evaluated. Yet, for one asset, the implications can be rather straightforward for risk trends, trouble in global financial markets and undermining fiat: gold. The stakes are certainly higher than just a Dollar foil. Meanwhile, the cryptocurrency market's future is looking increasingly troubled. Its painful drop this past month has already shaken the core of the market as the interest in this asset class has largely been based on a speculative opportunism that thought it would only go up and provide a quicker return than the storied but paced S&P 500. How rude reality can be. Yet, as the weak-hand 'tourists' bail on the hopes of becoming overnight millionaires, we can actually see more permanent problems arise if the market itself is questioned for stability. That is a tangible threat with news that the CFTC has subpoenaed record from Bitfinex and Tether amid rumors there are accounting issues at play. Or, a threat to the future draw of fresh funds, Facebook announced it was banning crypocurrency and ICO ads - both new and established. We discuss the active market, its opportunities and risks in today's Trading Video.

Dramatic S&P 500 Breaks Calm Seas, Dollar Has a Very Busy Day HeadDramatic S&P 500 Breaks Calm Seas, Dollar Has a Very Busy Day Head

To receive John’s analysis directly via email, please SIGN UP HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES