The S&P 500 and Nasdaq saw a midday boost but lost their energy as tariff concerns returned, benefiting short-term intraday traders. Swing traders were advised to keep short positions on the main indices until a clear market reversal occurs. Monica Kingsley offers daily insights for traders, helping both intraday and swing traders gain from her analysis. Her guidance has been especially useful in these uncertain times, supporting traders since February 2020.

Foreign Exchange Market Insights

The USD/JPY remained stable around 158.00, impacted by Japan’s fiscal issues affecting the yen. The Forex market experienced volatility with changes in the EUR/USD and GBP/USD, along with a significant surge in gold prices, reaching an all-time high of nearly $4,900. Cryptocurrencies had mixed results. Bitcoin stabilized below $90,000, while Ethereum held its ground at $2,900. Meanwhile, Monero continued to decline, falling below $500 after recently hitting $800. US President Trump spoke at the World Economic Forum in Davos, claiming that only the US can secure Greenland. FXStreet notes that all information provided is for informational purposes and not investment advice. Readers should thoroughly research before making any investment decisions. The return of tariff volatility seen throughout 2025 has created a shaky and uncertain market. This nervousness is reflected in the CBOE Volatility Index (VIX), which remains above 22, starkly different from the calmer periods of 2024. This high volatility indicates that significant price swings are likely to continue in the weeks ahead.

Trading Strategies for Volatile Markets

For swing traders, this means sticking to a short position on major indices. Buying put options on the SPY and QQQ ETFs could effectively position traders for potential declines, especially since the latest CPI data from December 2025 showed stubborn inflation above 3%. In this context, the Federal Reserve is unlikely to lower interest rates, removing critical support for stocks. The current market favors intraday traders who can take advantage of daily fluctuations without holding overnight risks. Trading options with very short expirations, like those ending within the week, allows traders to benefit from sharp price movements driven by news. There is significant premium in options for tech and industrial stocks most affected by trade policy news. This cautious sentiment extends beyond stocks and into currency markets. The US Dollar is gaining strength as a safe-haven asset. The US Dollar Index (DXY) recently surpassed the 105 level for the first time since the late 2025 turmoil. This indicates that derivative trades favoring dollar strength against currencies like the Euro and Pound Sterling continue to be attractive. Create your live VT Markets account and start trading now.

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