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Typical Market Reactions to Tragic Geopolitical Events

A tragic event happened with the crash of Malaysian Airline flight in Ukraine. The crash caused an immediate reaction in various markets from Bonds, to Stocks, to Gold and even Currencies. In this
Greg Michalowski, Founder and President of GregMikeFX.com, a foreign exchange consulting company, and author of Attacking Currency Trends (WIley Publishing) has 28 years experience as a trader and financial analyst. His career began at Citibank New York and later at Citibank London where he was a Vice President and trader of interest rate derivatives. He later joined Credit Suisse First Boston, New York, in the same capacity as a derivatives trader and market maker in the banks Funding Department. In 2000, Greg transitioned to FXDD where he was one of the founding employees of FX DirectDealer (later FXDD). While at FXDD, he helped manage the currency risk, and later become the Chief Currency Analyst. Greg has educated and spoken around the globe to thousands of retail traders. He has written for various publications including Equities magazine. His thoughts on the forex market have appeared in the Wall Street Journal, Bloomberg, and Thomson Reuters.
Greg Michalowski, Founder and President of GregMikeFX.com, a foreign exchange consulting company, and author of Attacking Currency Trends (WIley Publishing) has 28 years experience as a trader and financial analyst. His career began at Citibank New York and later at Citibank London where he was a Vice President and trader of interest rate derivatives. He later joined Credit Suisse First Boston, New York, in the same capacity as a derivatives trader and market maker in the banks Funding Department. In 2000, Greg transitioned to FXDD where he was one of the founding employees of FX DirectDealer (later FXDD). While at FXDD, he helped manage the currency risk, and later become the Chief Currency Analyst. Greg has educated and spoken around the globe to thousands of retail traders. He has written for various publications including Equities magazine. His thoughts on the forex market have appeared in the Wall Street Journal, Bloomberg, and Thomson Reuters.

A tragic event happened with the crash of Malaysian Airline flight in Ukraine. The crash caused an immediate reaction in various markets from Bonds, to Stocks, to Gold and even Currencies. In this report Greg Michalowski of GregMikeFX outlines what typically happens in the markets when a tragic event happens – like a suspicious plane crash – and then shows how the markets reacted to such events in this instance. 

While, as of the morning of July 17 the cause of the crash was still unclear, that did not stop traders from speculating the worst. "Often times, the market doesn't wait for answers," Michalowski says. "It'll simply react to the events."