As equity markets continue to climb ever higher and breaking out into new high ground, it is the VIX which is moving at the same speed in the opposite direction, as fear is replaced with complacency with the sun shining again as risk appetite returns to the markets.
It was another day of solid gains for equity markets yesterday, with the NQ E-mini leading the way higher, and closing with a wide spread up candle ending the session at 4094, just shy of the psychological 4100 price level which was missed by o.25 of a point!
As always, whenever there is a market correction, and for whatever reason, the bears take heart, emerging from the undergrowth to call the top of the market once more!
It’s been a period of pause and reflection for equity markets, following the picture perfect price action of August, as the up elevator finally reached the next level, rolling gently over into the current phase of price congestion.
As US markets returned to work yesterday after the long Labor day weekend, and an even longer summer, trading for gold started with a bang.
There are so many trading maxims it’s often hard to ignore them, but there are two that spring to mind considering the daily chart for the Emini NQ this morning.
Like many of the major currency pairs at present, it’s US dollar strength which has been the primary driver over the last few weeks, and for the USDCAD, which moved firmly lower once again, the decline in the price of oil has also added further momentum to the move.
Price action on the major US indices yesterday could best be described in one word, indecision, with all of the Emini futures closing with a doji candle of one variant or another.
The Canadian dollar has continued to come under heavy selling pressure once again today, driven by a resurgent US dollar, which has now broken through the key 81.30 level on the daily chart of the dollar index, to move firmly higher from this platform of support which is now in place.
Yesterday the YM E-mini index future delivered a masterclass in trading what you see, and not what you think. Trading with an opinion is one of the most destructive approaches to the market – just ask the euro bears who have been shorting the single currency for years. All to no avail.
