HedgeFundLIVE.com — After another unexpected move in the market yesterday, it is hard to make a prediction of where the equities will head today. The US’s debt was casually downgraded premarket, which caused a panic. The overall position of the current market, from a technical perspective, is extremely difficult to read. It seemed most markets took a hit early yesterday and then recovered some ground as the day went on, as Dean says a lot of value “went to money heaven”.
As a young trader, it is tough to want to jump into action on these moves. This isn’t the first event in the past few months that has caused large moves and most of them are still lingering. Japan’s radiation status, Euro debt (and now Us debt has been brought to the forefront), uprisings in the Middle East, and oil supply shocks, are all still prevalent in the mix . All of these can be lumped into one risk category, Headline Risk. This means that the market swings, not based on the status of the actual problem, but on the urgency with which media companies present the news. CNBC and other financial outlets are controlling the market’s sentiment by firing stories of panic and relieve.
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