Trading Forex and CFDs is risky
Read HotForex Daily Market Analysis

Up Slowly Down Quickly Markets Never Change

Market Analysis

USA500, Daily 

U.S. equities extended their slump amid weak global trade overnight as the repricing of volatility and all its related minions in the algorithm world compounded the stock rout as momentum indicators flipped and the VIX initially topped 50.30 earlier for another 31% gain, on top of yesterday’s 50% leap from lows of 16.80. The short-vol trade had been a crowded one and its reappraisal has been equally violent. The Dow is 118-points lower, S&P sank 2-points and NASDAQ is up 10-points in pre-open trade, amid heavy pre-open short-covering. Yet huge “fair value” adjustments will redoubling declines during the opening minutes of trade. Asia was hit hard with a 4.7% slump on Japan’s Nikkei, 5.1% plunge on the HK Hang Seng and 2.9% dive on the China CSI 300. Europe is also sharply lower, but trailing those losses, with the Euro Stoxx 50 off 2.6%, German DAX -2.4% and Spain IBEX -3%. The slightly wider U.S. trade gap wasn’t a surprise, while Fed hawk-dove Bullard wasn’t convinced that the wage gain in the January jobs report signaled an inflation acceleration. He also saw policy as closer to neutral presently, providing some relief on the Fed front. The dollar index is up another 0.3% to the 90.0 area as the long-standing short-dollar bias is trimmed. Gold rallied has high as $1,346 before settling back at $1,334. Bitcoin slumped as low as $5,920 before rebounding to $7,200. Look for some more high volume activity today as a new equilibrium is sought, with 10% correction levels providing the first line of defence for re-balancing.

Technically, the key 200 moving average was brought into play earlier toady at 25602600 and 2700 remain key to the upside. The shake out is set to continue, even with RSI over sold at 25.

 

Click here to access the HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:

Stuart Cowell

Senior Market Analyst

HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Risk Warning: Trading leveraged products such as Forex and CFDs may not be suitable for all investors as they carry a high degree of risk to your capital. Please read the full Risk Disclosure.

Risk Warning: Remember Forex and CFDs are leveraged products and can result in the loss of all invested capital. Please consider our Risk Disclosure.