Adapting to Bear Market Conditions
Market disruption from President Trump's declaration of Steel and Aluminum Tariff which could turn into a TRADE WAR and add to INFLATIONARY pressure have driven the USD back down. This 'protectionism' behavior has been played by Trump for sometime which gives the market the condition of uncertainty that leads to equities in the decline.
This was breaking news during Fed Chair J Powell's testimony when equities where actually recovering higher and the DXY was above 90.50 level that resulted again into a market turn around and currently below the 90.00 mark. While the DOW in another triple digit sell off at 24315 as of this writing. And then again today's drop is no exception as bears are practically in control of the market at this time.
As we made mention that the markets are surrounded by all sort of drivers, whereas fear of another massive decline may well be in the making viewed by other analyst. Although, triple digit move when added altogether is quite substantial. And the trade war has been added to the equation for a really bearish market outlook at this time.
As we have been quite fortunate picking the right market instruments in a relatively declining market. And the NIKKEI 225 futures (describe below) have been more aligned with current market conditions with the USDJPY doing the same. Flight to quality indeed has been proven true time and again.
Let's see and keep a clear watch when a 'rest in motion' across the market can provide us a better glimpse heading into the last few weeks of the 1st quarter trading of 2018. Although, we'll remain with the USD time frame as it has been defined with the Fed's schedule of rate hikes.
The US #Equities spilled over the #NK225 and recovered to a high at 21551 just in time with the #USDJPY at 105.50 with an extension at the 105.25. This levels were practically aligned that is why we mentioned that a contrary move was indeed in the making. With the USDJPY making a price recovery trading at 106.20
ReplyDeleteAnd this proves to be the #VALIDATION of both before and after the fact. A typical market play reflecting #VOLATILITY is present in both sides of the market. Friday's #JOBS report would be the clincher for the rest of the week.
In times of market volatility across the markets, the FINANCIAL FUTURES market is great for trading strategies with Spot FX including the DX Futures. Meanwhile, the major indices and ETFs have their respective applications for certain market trade plan for medium to longer term investment strategies.
ReplyDeleteAll in all these market trade strategies are being applied depending on the goals and objectives that are set in every client / investors portfolio. There is 'NO ONE SIZE FITS ALL' as the market dictates it play and we do certain adjustments we it is called for.
For now, the Futures markets is one of the best applicable market venue for today's market conditions. And have been utilizing the flexibility of these markets to meet our objectives. As we have stated, learn to profit from the correlation of these instruments while taking advantage of the leverage and liquidity of what the Spot Forex market can offer.