Investors are trying to catch the falling knife

20 May 2022 – The stock market rout continues - so it is not surprising that the most popular market this week amongst our clients has been the NASDAQ index. In just the last few days it has travelled through 700 points of range - a swing of more than 5%. It would seem that many investors are trying to call the bottom of the falling knife that is the plunging stock market at the moment - the high tech NASDAQ index is down by around 25% for the year to date and we are not even six months into 2022. So far at least, stocks have yet to find a permanent base in this year’s slide and although some clients are looking to profit from the slide by short-selling, the majority are still looking to buy the bounce - but these are proving to be short-lived. 

It is more surprising to see oil so popular still and in second place of the top traded markets on our platform - the last couple of months have seen crude trade broadly sideways, after the Russian invasion-inspired surge. Some clients do still seem to expect another explosion higher in the price of energies - although opinion is more split on oil than equities. Around a third of clients trading oil are actually expecting a fall. Clearly this is still very much a news-driven market and even though the last few months have seen low volatility by recent standards, any developments in the Russia/Ukraine war can change sentiment very quickly - in either direction.