The attack on Ukraine by Russian forces has intensified overnight with the nation’s largest nuclear power plant coming under fire.
Ukraine’s Foreign Minister claims an explosion at the Zaporizhzhya power plant would be 10 times larger than the Chernobyl nuclear disaster.
Russian Prime Minister, Vladimir Putin, has since warned “the worst is yet to come” sending global equity markets lower today.
The old stock market maxim of “buy the dip” is well known. When the market is in a general uptrend, a trader will buy a position, following a short-lived decline in asset prices, anticipating the market will once again trade higher.
Lesser known, is the saying “sell the rip”. Traders see rallies within a general downtrend, as an opportunity to sell before the decline resumes.
As you can see from this FTSE 100 chart, we are very much in a “sell the rip” environment. The current market conditions are unfavourable and the near-term future is uncertain.
We are seeing clients close long positions and/or add short-selling trades, when the market enjoys a brief improvement.
On Fridays, especially, we are seeing this defensive tactic implemented. Traders keen to minimise ‘weekend-risk’ – 2 days of uncertainty without the ability to manage positions.
Sign up to the City View newsletter to stay up-to-date with market news.
By Marc Kimsey
