Weekend Reading: On A Cliff’s Edge

By Tyler Durden

Authored by Lance Roberts via RealInvestmentAdvice.com,

After a week on vacation, I got the joy of coming back to an Administration threatening North Korea over nuclear weapons.

Now, you would suspect the possibility of nuclear war might just be the catalyst to send markets reeling, but looking at the market’s reaction on Thursday, I suspect there will be t-shirts soon reading:

“I survived the threat of nuclear war and the ‘great crash of 2017′ of 1.5%”

As shown, the market did register a short-term “sell signal” last Friday and downward pressure has continued to build all week. The sell off on Thursday led to a break of the 50-dma and is threatening the bullish trend support line which has existed since the beginning of the year. IF the market does not regain the 50-dma by close of the markets today, I would suspect we will likely be looking for a decline to 2400. Such a correction, a whopping 3.03%, would likely shock many investors who have become overly complacent in recent months due to the abnormally low levels of volatility.

The sell-off on Thursday also resulted in a sharp snapback in volatility which had recently touched historically low levels. While this is likely not …read more

Source:: ZeroHedge