Global macro overview for 25/08/2015:
The sea of red has been seen all over the global markets yesterday and sheer panic has started in China overnight. The Chinese stock index dropped 8% in a single day, prompting a record jump in volatility (measured by CBOE Market Volatility Index – VIX). After the open, the EU equity markets have been hammered down together with US markets later on the day. In my opinion, there are two main causes of such a moves in the global stock markets: the global concerns about the sluggish global economic growth are escalating and the August low market liquidity situation (holiday season) are making the price moves more sharply and unpredictably.
The SPY (S&P500 ETF) moved straight into the bearish territory yesterday and despite the fact it tried to rally back up to close the bearish gap, the negative sentiment has overcome any bullish attempts to get higher. Please notice that any close below the demand zone 181.95-188.40 is very bearish.
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