It all boils down to risk

As mentioned in an earlier entry, risk sentiment is now a major determinant for the direction of the markets. It appears that the markets, whether the stock markets or the currency markets are plagued by fear. Despite the inauguration of the new U.S. president, DJI fell more than 300 points last night. In Obama's speech last night, he spoke of hope and fear. Indeed, if we strip down the markets to its bare minimum, its merely a play between people's hope and fear.

The Chinese says 新官上任，三把火 , meaning that when a new leader takes over the reins, he will often begin implementing policies and changes in earnest. Similarly, I will expect Obama to swiftly lay out plans to address the U.S. economy, his current most pressing issue at hand. If he succeeds in convincing us, the market may rally and risk sentiment might again shift into reverse gear.