Perhaps one of the most overlooked reasons behind macro market volatility is uncertainty. History dictates that among several factors that indicator market direction, sentiment, and breadth is the unique notion of unclear economic and futures bearings.
Most recent market gyrations are, at least for the short term, are a result of a number of unclear factors; economic conditions in China, fluctuations as they relate to the Chinese Yuan, US Dollar, and other major currencies, renewed conversations about the likelihood of a global recession, crude oil’s seemingly endless volatility and its impact on OPEC and US based producers, and the “new” fed stance on the rate environment in the US.
Although most of the aforementioned events and concerns among traders and active investors are not new to the market place, it is important to note that perception and impending uncertainty can and often does dictate market direction. Whether this type of volatility will continue for the rest of January remains to be seen.
Among the rhetoric that market participants look for in such interesting times is commentary from US Fed governors on domestic and international policies, global political and economic leaders.
In addition to economic indicators, traders do keep a close on eye on important technical levels on each of the currencies, commodities, and market indices. Technical analysis and major support and resistance levels in the broader markets are a critical aspect of modern trading methodology.
The TradeXchange maintains alertness as it monitors the current global economic situation and the ramification of potential uncertainty.