FxPro Financial Services Ltd | Sep 15, 2021 03:47AM ET
Once again, decline prevails on the stock markets. US indices closed lower for the fifth trading session out of the last six. Chinese statistics added to the anxiety in the markets on Wednesday morning, failing to meet the forecasts.
Technically, the pressure on US equity markets echoes what we have seen every month since April: indices are slumping ahead of the monthly or quarterly expiration of futures and options on the third Thursday of the month, slang termed "witching day".
The big question is whether this tactic will work this time. It is not uncommon for markets to experience significant long-term trend reversals near expiration dates. Therefore, cautious traders should wait for the "witching day" pattern to end. A consolidation below the 50-day moving average might initiate a deeper correction, by 5-10%, one we have not seen since last October.
America and Europe only ignored this reversal for a few weeks and then reversed downwards at an unprecedented speed in history. Negative market dynamics and signs of a loss of momentum in the economy could affect the Fed's plans to roll back stimulus.
The next FOMC meeting is a week away, kicking off a "period of silence" when Fed officials are not commenting. It promises to be a very nervous week for the markets.
The FxPro Analyst Team
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.