Friday 6 November: Thoughts on Thursday's sell-off .

The market initially cheered the Democrat mid-term results, but as the dust settled, companies at the forefront of AI expansion started to sell-off. Ultimately taking all instruments along fur a ‘risk off ride’.

My initial inclination is that this is a large bout of profit taking from overcrowded long positions. But how long it lasts is anyone's guess.

Today's NFP data could reverse or compound the negativity and I'll be keeping an eye on the headlines and the VIX post data to determine if I think there is a trade to end the week (in either direction).

AUD JPY is a very good risk proxy:

If the VIX remains high and stocks remain under pressure, AUD JPY will likely continue its fall into the weekend.

Alternatively, I wouldn't be surprised to see a strong reversal and I'm prepared to place a trade in either direction according to the post NFP headlines and price action.

Please feel free to get in touch with any questions.