Time for our weekly tick by tick of charts with Jordan Kotick, Global Head of Technical Analysis at Barclays.
Q. Stocks are under pressure around the world, especially markets like the Nasdaq.
What is your read on this?
A. Consistently since June, Risk in general and equities specifically have undergone a corrective move near the end of the month.
October is no different. While ultimately faded, these moves take time to play out. The Nasdaq being a market leader to the top side and a high volatility sector as well, tends to see the most aggressive move to the top side and the downside
Q. The dollar has also caught a bid. Is this correlated, what are you watching there?
A. The US dollar has been trading as a proxy for risk for the last 1 to 2 years. Remember how strong the dollar was when the market crashed last year for example. So if stocks correct, risk comes off, the dollar will be bid. We are watching EM space specifically, for example, Malaysian Ringgit and Indian Rupee. While both look to strengthen against the Dollar, they are also, as expected going through an uptick and corrective process
Q. Anything else we should keep an eye regarding risk short term?
A. Commodities. They are important in and of themselvesbut also since they too represent the market's leaning towards either risk seeking or risk aversion. The LMEX is up 90 percent this year. And while correcting short term, there is no chart damage at th