News Column

Forex: Does a Slowing Risk, Equities and Dollar Trend Herald Reversal

February 18, 2014

John Kicklighter

Talking Points:

** The S&P 500 extended its run, but momentum from this and other benchmarks is flagging quickly

** We look through the various, potential catalyst for a risk drive moving forward

** Scheduled event risk once again puts the Pound and GBPUSD on the hot seat with jobs data

Download the Consecutive Bar Indicator used in today's video for free and use it to measure the historical significance and over-extended level of the markets.

While the S&P 500 - as a benchmark for risk appetite - put in for a ninth daily advance, conviction in the drive has all but vanished. Is this cooling sentiment a prelude to a general reversal? Picking tops and bottoms is more a game of craps; but the evidence between fundamentals, technicals and market conditions are building up for a meaningful reversal in risk trends...given the correct catalyst. And, in an underlying sentiment move; the impact carries far beyond US or global equities. The US dollar, Yen crosses and many other currencies stand ready to respond to the speculative tides, bullish or bearish. We take a critical look at positioning around this big theme as well as opportunities in key event risk (as with GBPUSD) in today's Trading Video.

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Source: DailyFx

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