corona virus moves the market

There it is, a new factor of uncertainty in the markets. And it is called the corona virus.

The last week was ending with a hard break in the the markets.

The indices fell and the safe haven pairs had a little rally. And that’s clear cause we can price in risks but never uncertainty.

My prediction on this is that this virus development will move the market in next weeks ahead.

If the virus is able to spread itself even more and we see additional to this more mortality, we will see that the fear comes strongly back into the market.

For equities this could be a good timing for a little setback. The markets were in my opinion already a bit too high in relation to the risks which is still in the market.

So a little setback could be possible and a good opportunity for long term investors would be given to see some great buy opportunities.

On the other side it's a bad timing in the forex market for the trade related currencies, cause they're all at key levels for a turnaround at the moment. A shift in risk sentiment to the downside could break these pairs further down and the USD, JPY and the CHF even higher.

Look at it in the daily timeframe:

As a short term trader, I'm okay with the situation cause I can handle these situations on the daily and open and close them usual within a day.

But if you have longer term positions in the market be careful with your risk management.

We'll see if this will become a short term setback or a longer term global problem.

By Lukas Kuemmerle