Massive risk off trade in equities yesterday. Reasons cited:
1. Falling Euro/rising dollar
2. Fear that Federal Reserve is going to raise interest rates sooner than expected thereby adding more strength to said dollar.
3. Reason that should have been cited when this market started selling off two weeks ago. Market was broadly over bought after a nearly 6% rise from lows at the end of January. It's not that long ago that we were talking about Nasdaq 5,000 and making new highs on the S&P 500.
Investors don't mind volatility when the market is rallying. Boy do they hate it when the reverse happens and a nasty 2-4% loss occurs in a short period of time.
Market looks set to rally this AM. Will need to watch how that unfolds for clues as to future action. Also will be interesting to see how the market reacts as it again approaches new highs at some point. {Update 8:55-So far it's not much of a bounce!}
*Long ETFs related to the S&P 500 and Nasdaq in both client and personal accounts although these positions can change at any time.
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