As equity markets enter a period of increased volatility amid growing uncertainty over the timing of the Federal Reserve's first rate hike, the message to retail traders is to keep calm and carry on. These short-term spikes in volatility could lead to a couple of down days, but just because volatility is trending higher that doesn't mean equity market will go down. It just means that the unusually straight line up doesn't continue. Stocks tumbled on the last day of July, with the Dow and S&P500 posting their first monthly drop since January, as investors worried about Europe's economy, an Argentine default and a jump in U.S. labor costs prompted concerns about corporate margins. The market has been extremely resilient over the course of Ukraine, Iraq and now Israel.
Anyway, I don't think this is the end, maybe markets will find footing for the next few days and I will be looking for tactical bounce and see if buyers can show us commitment. If not, I will be trading to the downside from resistance levels.
Here is the chart of S&P500 where it broke down its accelerated trend line with potent, red candle. Potential buy area is around $1,896 to $1,916 - previous resistance and 100 EMA.
French stock index broke down range support at 4,280 and had two days of continuation down move. I will be watching for selling opportunity on pullback.
The dollar gained against global currencies. USD/JPY broke up descending triangle. Flagging near highs will show us commitment to this move, then expect continuation.
Microsoft after its earnings release was up, but after it broke intermiditae support at $44.30 dropped down and is heading to bigger support at $42.20. So, there will be opportunities both sides.
Next week important events calendar, Aug 3 — Aug 9:CNY Non-Manufacturing PMI
GBP Construction PMI
AUD Trade Balance
AUD Cash Rate
AUD RBA Statement
GBP Services PMI
USD ISM-Non Manufacturing PMI
MZD Employment Change
NZD Unemployment Rate
USD Trade Balance
AUD Employment Change and Unemployment Rate
EUR ECB Conference
USD Unemployment Claims
CNY Trade Balance