Breaking News

Equity Volatility Hinging On Trump's Tweets?

By Anna CoullingStock MarketsMar 13, 2018 12:15AM ET
Equity Volatility Hinging On Trump's Tweets?
By Anna Coulling   |  Mar 13, 2018 12:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

NQ Emini Daily
NQ Emini Daily

Yesterday was the start of another trading week, which not so long ago would have simply prompted a quick look at the economic calendar to check on any important item of fundamental news up ahead, but instead, now the first question most of us ask is what is Donald likely to be tweeting about today? Having blindsided everyone on North Korea, and regardless of whether the proposed meeting between him and Kim actually takes place, it was yet another example of the extent to which our trading and investing landscape has changed since his election in 2016.

Indeed, at present, trying to forecast or anticipate market sentiment and mood is akin to flying and suddenly being struck by clear air turbulence, which is a phenomenon both pilots and passengers dread, not least because although they know it can and does occur, there are no early warning signs and it usually happens when least expected.

Moreover, in our world Donald’s tweets have added a further layer of uncertainty which is then accompanied by volatility, and as I have said in the past, volatility can be your greatest friend or your greatest enemy as many traders and investors recently discovered when a number of highly leveraged inverse volatility ETFs imploded.

A side effect of this current environment is that trading can be so much more tiring and feel very much like a battlefield, where periods of inactivity and quiet are suddenly brought to a halt by the next barrage, which in our case is usually unleashed by Donald Trump!

However, as volume traders we do have an immense advantage, because it is at times such as these when the power of volume price analysis is truly revealed, and whilst price action together with our technical armory can provide some insights, it is only when volume is applied to the charts that the truth behind the price action becomes crystal clear.

This is seen most graphically when equity markets plunge, as we have seen in recent weeks, only for them to recover relatively quickly thereafter. What has been abundantly clear is the extent to which the market makers have been hugely active during this period, buying in volume in preparation for the recovery and rally higher.

The same approach is true of many blue chip stocks where the accumulation phase was self evident, before reinstatement of the longer term bullish trend. And for those stocks in a sustained bullish trend, recent volatility has merely been a significant correction and pause point in the longer term trend higher. But for those stocks with a bearish sentiment, this correction has simply reinforced the trend lower.

Moving forward, whilst yesterday has been relatively muted in the forex world, the NQ continues its relentless rise higher and has moved into new high ground, trading at the time of writing at 7155.25, with the phases of market maker buying clearly self evident on the daily chart.

Equity Volatility Hinging On Trump's Tweets?

Related Articles

Equity Volatility Hinging On Trump's Tweets?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email