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RISK AVERSION IS THE NEXT STRATEGY FOR OCTOBER...

Wednesday, September 26, 2012 4:35 AM GMT

   

 

...THE BREAK OUT IN THE BEGINNING OF SEPTEMBER ABOVE THE 200 DMA WAS NOT IMPRESSIVE ENOUGH TO CREATE FURTHER UPSIDE MOMENTUM.

WITH A LOT OF EUR SHORTS SQUARED IN THE MOVE FROM 1.2100 TO 1.3100 IT SEEMS THAT THE DOWNSIDE COMES IN THE FOCUS OF MARKET PARTICIPANTS AGAIN.

 

I WOULD ASSUME A BREAK OF THE 200 DMA IS HIGHLY POSSIBLE  CERTAINLY WITH ALL THE NEWS REGARDING SPAIN AND THE DELAY IN CREATING THE ESM.

 

THE WEAKER GROWTH OUTLOOK HAS TRIGGERED THE RISK BUTTON AGAIN.

QE3 IS THERE – NO LONGER BUY THE RUMOR ACTIVITY IN THE MARKET. IT SEEMS THAT ECONOMIC NUMBERS HAVE TO TALK FOR NOW BECAUSE CENTRALBANKS (BoE, FED, ECB, BoJ) ACT.

 

SO FAR THERE IS SOME TALK ABOUT THE US FISCAL CLIFF AND BERNANKE PREPARED THE MARKET ABOUT THE POTENTIAL IMPACT ON THE ECONOMY BASED ON FED ANALYSIS IN 2013.

 

IT’S DIFFICULT TO FIND OUT IF THE MARKET IS POSITIONED FOR IT. I WOULD ASSUME NO. IT SHOULD CREATE SOME RISK AVERSION.

ONE POLL SIGNAL A SHIFT BY MONEY MANAGER FROM THE EUROPEAN DEBIT CRISIS TO THE US FISCAL CLIFF ISSUE AS THE MAIN UPCOMING RISK FOR THE MARKET.

 

DUE TO QUARTER END ITS DIFFICULT TO FIGURE OUT IF TODAY’S EQUITY MOVE IS PORTFOLIO ADJUSTMENT OR THE START OF RISK AVERSION

 

I WOULD ASSUME RISK AVERSION IS THE NEXT STRATEGY FOR OCTOBER.



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