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 Why The Real Market Chaos Is Yet To Come: A Surprising Take From Goldman Sachs

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RR Phantom

RR Phantom

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PostSubject: Why The Real Market Chaos Is Yet To Come: A Surprising Take From Goldman Sachs   Why The Real Market Chaos Is Yet To Come: A Surprising Take From Goldman Sachs Icon_minitimeFri Jan 04, 2019 3:13 pm

If one asks traders what was the common market theme over the past three months, among the various (often angry) answers, one will stand out: general prevailing chaos, manifesting itself in soaring volatility which coupled with record low liquidity and a sharp pick up in trading volume, resulted in disjointed, erratic price action that crushed all momentum and trend-following strategies (which these days is most of them).

Why The Real Market Chaos Is Yet To Come: A Surprising Take From Goldman Sachs Vol%20vs%20liquidity

Commenting on this phenomenon among others, yesterday JPMorgan quant Marko Kolanovic said, correctly, that "liquidity has become to a large extent driven by market volatility" reinforcing a negative feedback loop between volatility and liquidity, and as the most recent examples he cited the unprecedented drop in futures market depth or "record low liquidity" we discussed previously (shown in the chart below), the currency flash crash on Jan 2, or the equity market “upside crash” on December 26.

https://www.zerohedge.com/news/2019-01-04/why-real-market-chaos-yet-come-surprising-take-goldman-sachs?fbclid=IwAR13jYypzynD7bcS0EbONHIjQcNzlvyXogfxmGd0Bu3tilFF_NSOtRulZqU
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Why The Real Market Chaos Is Yet To Come: A Surprising Take From Goldman Sachs

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