US equities are down 1.4% as midday approaches, helping spur another bout of short-covering in the dollar. Risk is “out” after being welcomed back with a bang just a day ago. Perhaps we should just buy volatility and sit back and watch….
the old saying goes that markets are most volatile at tops and bottoms, so perhaps we are in the midst of a topping process for the risk trade and a medium-term bottom for the dollar. A break of 1.4670/80 would go a long way toward confirming that view, as would a break of about 1037 on the S&P.