Another leg lower for stocks and another leg higher for volatility
European stocks are now all over 2% in the red. The pound and euro have just dropped in line with some yen buying. Fear has the market firmly in its grip and that only means one thing, the sell button gets used more than the buy button.
GBPUSD has some minor support around 1.3920 but the bigger line is the 50.0 fib of the Jan rally.
There’s bids noted ahead of the figure but there’s also some decent stops building just under. A break there and we could see this entire rally wiped out.
So, is there something bigger than just a correction going on? That’s hard to answer beacuse we’ll only know by watching. If this is just a normal correction, we’ll want to see signs of short-term double tops or bottoms forming, and then protection of those levels stepping up/down. Until then, if you’re trying to fade these moves, do so with very tight stops in case you’re wrong.
Let us know what you think is going on and whether this is just a blip or something more.
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