One of the most critical ideas you need to understand as an investor is that while the media focuses on stocks, they are the usually the last asset class to “get” major changes to the financial system.
This is simply due to liquidity and size of markets.
1. Globally, the stock market is about $69 trillion in size, trading about $191 billion in shares per day.
2. The bond markets are well north of $140 trillion, and trade about $700 billion in volume per day,
3. The currency markets are unmeasured as every currency trade is ultimately a pairs trade (meaning to buy one currency you have to sell another). However, we do know that the currency markets trade $5.3 trillion in volume per day.
Put another way, the currency markets trade over 26 times more volume than the global stock market every single day. As such they are the most liquid, sensitive markets in the world.
So major changes in the markets first hit in the currency markets. And the key item to watch is the $USD.
The US Dollar is coiling tighter and tighter into a triangle pattern. If we get a breakout to the upside, the next target is 97.
Historically, spikes to this level have resulted in a stock market meltdown soon after.
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Best Regards
Graham Summers
Chief Market Strategist
Phoenix Capital Research
via http://ift.tt/2c8xXbB Phoenix Capital Research