(when these one to two-week market shocks take place, those trading equity, FX and crypto tend to do very well simply because the two-week patterns are predictable).
Both short sellers who take two-week market positions and those with automated trading strategies that sell in such market shocks are clearly in attack mode over the past two days. It is the lawless behavior of these selloffs that attract a lot of attention, especially after a rate cut that we accepted as an insurance cut or trade war support.
It seems to me that the US-China trade war, the one that will have no deal in the immediate future, is becoming the center of attention while the protests in Hong Kong are turning out to be a serious problem for the CCP, and President Xi.
The scary parts are now coming……and fast…..
Nikkei 225 – 20,100 is my target. Of course the global selloff will be fueled by the S&P 500 and its breakdown in the next week to 10 days. Global markets are in for a big shock in the coming weeks.