What did the market know on Monday to cause equities to explode to the upside that it didn't know on Friday?
The answer? As Jack Nickleson would say, "You want truth? You can't handle the truth.... !"
We want reasons, but the cause and effect of stock behavior is tantalizingly vague.
Truth be told that the market is always right, but sometimes doesn't know anything. What does the market know right now and when did it know it is the $64,000 question.
Insider trading may be illegal but I never heard of big money that didn't take a position because it didn't think it knew something the other guy didn't. But, after all, that's why technical analysis works at turning points: there are typically tell tale signs by the big money as it distributes and accumulates.
Call me a cynic, but methinks you don't turn the U.S. Equity-Supertanker on a dime unless the engine room is chock full of agenda. Since when could we ever figure it out? That's the problem, thinking too much. Who was at the door handing out invitations that the market was rational, the the market as supposed to make sense?
As traders all we've got are set-ups. Set-ups are just set-ups and nothing more, nothing less. An edge, not a guarantee. Speculation is observation, pure and experiential. Thinking isn't necessary and often just gets in the way. The trick is to believe what one sees.
So what did Gold see on Tuesday that shook it up, sending the metal down $20? Is the short dollar trade overcrowded? Will The ECB follow suit and lower rates this week? If all fiat paper is devalued will the dollar be graded on a curve? What did the market know about the commodity complex shakedown that it didn't know on Monday?
In my view we should have our answer this week. Friday’s economic data looms large.
Lets face the music and dance.mp3.http://trunghocnguyendu.com/photo_components/media/Lets_Face_the_Music_and_Dance.mp3
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