2 indicators that explain the volatility
2 indicators that explain the volatility. Aside from the geopolitical situation, there are two indicators that may shed some light on this (recent) volatility. 1) Investors are leveraging up. Leverage in the equity markets has reached new highs recently. While such activity doesn't necessarily lead to a significant correction, it's a sure way to get some real volatility going. 2) US retail punters are swinging for the fences. Another indicator that has been pointing to an environment that is ripe for some good market swings is the IMX index. It is basically a measure of how aggressively accounts are positioned across the TD Ameritrade platform. Unlike the bull/bear surveys, this index actually tells us what retail accounts are doing rather than how they feel. And up to the last week of July, positioning has been increasingly aggressive. (VIEW LINK)
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