The Dow Jones Industrial Average fell 780 points today in another aggressive sell-off that, by the end of the day, turned into a much smaller loss. The reason was a report that the Fed may pause its hikes, at least for the short-term. This week has been a sensitive trading week as the China trade tension news and the Fed news have been dominating headlines. The report says that the Fed leadership do not know what their next move will be after December. This caused a snap-back rally with the Dow Jones average falling just 79.50 points on the day.
The talk of a US-China trade war has many traders concerned that the next big event in markets will be a recession. Some traders are saying that recession fears are now setting in and markets could trade flat or lower for the next 6 months. Investors are naturally on edge. As a result, some investors are moving into cash and with fears of lower volumes in December, they are naturally concerned about shockingly fast markets. Read out articles on machine trading and the speed at which markets are movin. We at Classiarius feel that this volatile trading is here to stay and that in the coming 3 weeks, could shock investors on the downside.
Also, note that European markets are trading at new lows and some seeing their worst loss since Brexit. DAX closed down 3.48%, while FTSE closed down 3.15%. There could be more pain in the coming weeks.