We have seen a fall of nearly 800 points from 18000+ in the last few days, Although it seems like a big deal, it really feels like it is not.
The reason? Currency markets of most of the developed countries are melting down in an epic way.
Dollar Index is rapidly surging daily
What was at 108 a week or two ago is now trading near 114. Surging by 1-1.5% almost on a daily basis as major constituents like euro, yen , pound and now even Chinese yuan are just getting crushed in a manner that reminds us of some of the shitty crypto currencies.
Great Britain Pound (GBP) is melting
GBP is falling 2-3% daily and is now down 23% YTD n is on course to be amongst worst performing currencies.
Also, keep an eye on Euro, after breaking parity with dollar, it is now down to 52 week lows of 95.7 (4% fall in a timespan of 2 weeks)
China is also now in a worried state
Summary
Things are in an extremely messy state for many major economies and these changes , whether are temporary or structural (tough to say, for now) , will definitely impact global equity markets in both short n long run and because the big moves have just begun, there is a chance that , in the global currency markets, things may have not yet bottomed out and it will be a prudent move on our part to not have any heavy exposure in the market till there is absolute panic.
I’ll focus on slowly increasing exposure on big falls.