Pessimism continues to dominate world markets this morning, promising a follow-on to yesterday’s instability. I foresee three possible scenarios (from most “obvious” to least):
- The sell-off will continue, with volatility spiking higher;
- Markets will find support for a day (or two, or three) and then drop further;
- We’ll see a sharp rebound from oversold conditions before the end of the week.
What’s important to us isn’t so much which of these plays out, but that fear and volatility are running higher than we’re comfortable with for entering new positions. I’ll keep monitoring market conditions and give advance notice ahead of any trade alert. But for now, at least, we’re staying on the sidelines while markets work through the current wave of volatility.