Middle east concerns.

A little bit of negativity has crept into the market. Today's US ISM data shows still sluggish manufacturing. And concerns over events in the middle east is starting to have an effect. The VIX is up to 19, the S&P is under pressure and the US 10YEAR yield is down which are all classic 'old fashioned' rish off signals. (I've not spoken about the US 10YEAR lately as it's not been particularly relevant, but today's move down highlights the negative sentiment).

So, just when you thought it was safe to continue 'long AUD JPY' trades, the pause button is pressed. 'hopefully' only for a short time. But it's a good reminder that anything can happen at any moment and to never get complacent.

There is a case to say why not take a risk off trade? And it's a valid point. But personally, because 'risk off' is against the recent tide of positivity. In the interest of prudence, I'm going to wait for 12 hours or so to see if things settle down.

My preference would be for a return to positivity. But, if negativity escalates, the VIX rapidly rises above 20 and stocks continue falling. I will be prepared to trade the negativity.

Feel free to email any questions: johnelfedforexblog@gmail.com