Last night was a massive day for traders, with the volatility index jumping an incredible 14% last night and around 35% since October 13.
And it wasn’t just a US stock problem.
The STOXX index hit the lowest level since March, with investors around the globe voicing concerns over stronger restrictions, rising cases, and uncertainty around further stimulus.
On the stimulus front, Peter Schiff provided some wise counsel to those waiting for it.
It didn’t help that Germany announced a one-month partial lockdown, which will run for the full month of November. You have to feel for all those in Europe right now.
Overnight volatility led to plenty of interesting moves on the leaderboard, with a few of the experienced traders moving higher while some of the October favourites slipped.
In particular, Chunmei Zhou fell from the top of the leaderboard to 9th, unable to switch directions from open long positions to close out and go short.
An incredible effort from Yi Yun Zheng, sitting atop the leaderboard on 125%. Yi Yun trades a wide range of markets, including Gold, Dow Jones, GBPJPY, and WTI Crude Oil, to name a few.
Du Lian Lu, who came 3rd in Stage 4, is well placed at 103%, well within striking distance.
Hong Lai Li, one of our most consistent performers (10th in Stage 1 and 5th in Stage 4), is currently 4th on 54%.
And to showcase how difficult this month has been for traders, we have a tight bunch of traders between 31% and 54%.
Here is the leaderboard as of today.
Let’s take a look at a few of the bigger market moves overnight.
There is no doubt the US election is building momentum, with President Trump aggressively campaigning and tweeting.
Overnight, he was incredibly vocal about the ‘left-wing media’ and how they are doing everything they can to support the Biden camp.
Gold pushed lower towards the medium-term support level as the US dollar strengthened considerably overnight.
According to Forbes, the real reason Gold fell overnight was outlined in this screen capture below.
And the idea around investors not panicking over the falls last night plays out in the chart as well. You can see how the support level is still holding without any issue, and no major lines were broken.
The same can be said for Silver, with both precious metals seeing selling pressure but well within current support levels.
The Nasdaq completed the move back to where it started at the beginning of the month overnight, having recently dropped 1059 points or 8.6% in the last 11 trading days.
For the bears out there, this should have been a golden opportunity to take advantage of these big moves.
But this highlights how challenging the recent market has been leading up to the US election.
The volatility is increasing along with the uncertainty.
For those who trade in the direction of the most dominant medium or long-term trends, fading the Nasdaq bullishness on the 13th of October would have been incredibly difficult.
But as you can see on the hourly chart below, the Nasdaq has continued to break lower out of the tight bands it has been trading in.
With all the big moves across the US dollar, the US and European indices, you would be forgiven for missing the wide-range day on Bitcoin.
Bitcoin managed to move 981 points from high to low.
And as you can see from the 5-minute chart below, the early move was against the selling pressure seen across the indices.
Perhaps many crypto enthusiasts saw this as an uncorrelated hedge against their stock portfolio.
Couple that with the breakout traders who took advantage of the strong move higher on the 27th of October, and you have a continuation opportunity sweeping up a lot of ‘smart money.’
But no sooner had Bitcoin hit a new short-term high than profit-takers stepped in and drove the price down 981 points at the worst. That’s a 7.0% range.
We are getting so close to awarding the October trading champion.
And the volatility across the most significant assets in the world continues to rise.
Which markets will you be trading as we close out the month?
Breakout traders should be having a field day between today and tomorrow.
Will we see a contraction in volatility between now and the election, or will markets heat up before the weekend?
There has never been a better time to be involved in the markets as we lead up to the biggest US Presidential Election in our lifetimes.
Are you ready to join the next Stage? Click here to register an account.
Ashley Jessen is the author of CFDs Made Simple and Head of Marketing at ACY Securities. He has been in the financial services industry since the year 2000 and worked for some of the leading companies in the CFD, Forex and Online Trading space.