Video: Are We in a Risk Correction or Risk Reversal?
• Volatility has steadily climbed these past months and spikes in volume reflect very active markets
• With the increase in activity, there has also been been a drop from sentiment benchmarks like the SPX
• While risk aversion has been broad, its depth is still limited to short-term market interests
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Market activity is rising rapidly. With volume from EURUSD hitting levels not seen in three years and the S&P 500 leading a range of 'risk'-sensitive assets lower, it looks like a systemic market shift is starting to take root. However, a market-wide change in speculative appetite and positioning is difficult to engineer. And, there have been plenty of false starts with similarly convincing hiccups over these past years. To steer the entire financial system, few things carry the necessary weight to turn the tide. Investor sentiment is one of the universal constants. Yet, have we seen the turn in risk appetite or are we still seeing oscillations in an increasingly short-term market participant group? We discuss correction versus reversal in the deepest market theme in today's Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.