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Title text for next article Join our Telegram group Cryptocurrency Home Technical Analysis Calendar Economic Calendar Live Charts About ForexLive Contact Us More Economic Calendar Live Charts Social Trading Central Banks Live Quotes Forex Orders Session Wraps Forex Tools Forex Jargon About ForexLive My Preferences Compare FX Brokers Compare FX Brokers Live Charts Social Trading Central Banks Live Quotes Forex Orders Session Wraps Forex Tools Forex Jargon My Preferences LON SDNY +11 NY -5 TYO +9 GMT -- FL Home > Forex Forex Fundamental Strategy Technical Analysis Forex Options, Orders & Fixes Basics Trading Rules Trading Psychology War Stories Trading Techniques Videos Economics Market Wisdom Unusual Markets Trusted Gurus From Brokers Compare Brokers Latest Videos Forex Articles UNUSUAL MARKETS | MARKET WISDOM Wed 22 Jan Finding value in fear It is not every day that markets get caught out by overwhelming fear ForexLive CDC confirms that traveler from China diagnosed with coronavirus in SeattleChina coronavirus news conference - 440 cases, 9 deathsCoronavirus infection among medical workers validate people-to-people transmissionMacau confirms first case of coronavirusThailand says 4 confirmed cases of coronavirus The new coronavirus outbreak brings back many lessons in markets and one of them is to not be too blinded by the fear. There is no doubt that things may still get worse before they get better, especially with the fact that the hectic travel period during the Chinese New Year holidays is yet to come. But ultimately, it is all about trying to identify how bad things will really be. We're already seeing markets start to be a little more greedy over the past few hours - as compared to the pessimistic behaviour seen in trading yesterday. US futures are up by ~0.5% while the Shanghai Composite index has erased gains of over 1% earlier to hit session highs now, keeping near flat levels on the day. As with all such related fears and geopolitics, they will eventually pass at some point in time. Instead, the real fear in all of this is whether or not the new coronavirus outbreak is going to have a more profound impact (longer-term) on markets. In this case, perhaps it may chip a little away at the Chinese economy this year. However, unless this threatens to be develop into something like the SARS virus outbreak back in 2002-03 and plague markets with some element of uncertainty for a few months, expect markets to quickly move on from the pessimism here. Sure, there may still be some days in the near-term that fear may creep back in. But don't squint your eyes and cower in terror. Instead, open your eyes and look for value. Eventually, there will be a turning point and that's when fading the fear pays off. MARKET WISDOM Mon 20 Jan The jump from trend to bubble is faster than ever What's the rush? I love this quote from George Soros because it is more true every day. He said it in his book on the crash of 2008 but he might be talking about fake meat, marijuana or electric cars today. We can all see trends towards environmentalism, renewables, e-commerce, the internet, eating out and TV streaming along with a dozen other things. The reaction function of the market is to identify a trend and throw money at it in a virtual gold rush, hoping that one day the claims will pay. Last year we saw it in WeWork. Co-working was undoubtedly a trend and WeWork was the biggest and best-known name in the space. SoftBank and others drove the company valuation into the stratosphere but it all came crashing down when the collective conscience of the world realized the business model could easily be replicated. The big macro trend of the generation is low and falling inflation. We're at the point now where every bond investor -- voluntarily or not -- is betting on low inflation. The perception (or perhaps misconception) is that inflation will stay low forever. If the market is wrong, it would be the mother of all financial busts. The bond market is worth more than $100 trillion with a myriad of derivatives layered on combined with endless knock-on effects, like mortgage rates. Other trends are less controversial but misconceptions abound. Renewable energy is coming and the age of fossil fuels will one day end. Yet just in the past few years we've seen a dramatic drop in investment in fossil fuels. While a 50-year investment in a oil field is a bad idea, there is unceasing demand for the next 15 years. If no one is bringing on new production in the meantime, what happens to the price? I often think about the paradox of a remote mining town. With mines, you usually know the lifespan so you know when it will close, everyone will be out of a job and the local economy will collapse. That leaves the housing market in a precarious spot. At the end of the line, you want to be a renter but somewhere before that, it makes more sense to buy. When exactly is the crossover? As the time winds down, you would assume there is massive demand for rentals and that market could become completely disconnected. Any way you look at it, the volatility would skyrocket. That's how I see the fossil fuel era ending. It's like a mine right now that has a short life. It's past the point where people are investing in projects that have a payback period of more than 30 years. Yet it's still highly uncertain when oil won't be needed anymore. One belief was that shale was a perfect bridge because it could be ramped up quickly and operations have short shelf lives. However that turned out to be a misconception itself and wells are costing much more. The final piece of the puzzle is price. I think it's inevitable that we get a spike in oil prices but even at $80, $90 or $100 we may find that companies are loath to invest because the market won't reward it and won't believe high prices will last. Markets are the best way to price anything but in a changing world, be wary of identifying any 'trend' and assuming it will lead to profits. ForexLive 12 TECHNICAL ANALYSIS Sat 18 Jan The Trump impeachment legal team and your trading. How are they related? It's all about building your case In an economic week in the US where the existing home sales, the weekly unemployment claims and the flash manufacturing PMI are the only events on the docket, it is hard to get too excited about the prospects for trading. At least from the economic release angle. However, the US impeachment trial of President will begin this week with enough uncertainty and drama for viewers to be mesmerized - and potentially ruin any hope of movements in the forex markets as a result of the made for TV drama. At the end of the day, however,it will take a "2/3 supermajority of those present in the Senate" to impeach the President. With 53 Republicans, 45 Democrats and 2 Independents, the odds are in the President's favor that he will NOT be impeached. Nevertheless, the show must go on and there are other battles to be won through the process. It is after all, an election year. If impeachment is not possible, voting out the President or shifting the power in the House and Senate is at stake. It IS a high stakes game. To defend himself, President Trump announced his team of lawyers who will defend him yesterday. Included in the list is Alan Dershowitz. Dershowitz is a retired Harvard Law Professor and famed criminal defense attorney. He became the youngest full professor of law at Harvard in its history at the age of 28. Dershowitz is a Democrat who endorsed Hillary Clinton, calling her a "progressive on social issues, a realist on foreign policy, a pragmatist on the economy". He also supported Barack Obama for re-election on the basis of his "excellent judicial appointments, his consensus-building foreign policy, and the improvements he has brought about in the disastrous economy he inherited". He campaigned against Trump during the 2016 election, and has been a critic of some of his actions including his travel ban, and the re...