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Posted by Tango
on January 30, 2020, 9:59 am, in reply to "Re: Market
Nice to see you posting, Juan. I think that markets are profoundly reacting to the coronavirus in general but also to their individual triggers. Equities and gold are reacting to both the coronavirus as well as the FOMC decision of yesterday. The industrial metals, namely copper, grains and cotton are subject to the Yuan which has been dropping ever since the coronavirus began. Sugar and cocoa have been on an uptrend for some time, and crude is subject to sufficient supply and lower consumption.
Our market is foremost influenced by fundamentals. It is and has been a supply driven market. It can buck the downward trend as we have seen. Investment in the market is a powerful force. We saw this as index rebalanced and reinvested causing short covering and additional buying by funds. If however the drop that we saw this week is due in part by the coronavirus, causing investors to liquidate assets, then it is a limited factor. The more significant factor is the robotic fund selling, for now. Just my view. Would like to see others’ opinions. Hopefully Jack Scoville will comment.