Professionals hunt amateurs stops. That is something floor traders also love to do. I thought that after we popped into new highs there wasn't much reason to run it much higher as we had taken out the upside stops and there wasn't much reaction. I ain't big enough to decide the market patterns. I can only calculate them out the best I can and guess at where they will turn it. The equities market nowadays works the exact same as the Forex market use to work. Fundamentals have gone out the door and peoples emotions are far more susceptible to price movement than in past markets. Quote from market wizards: ==== How does your current trading for your own management firm differ from your trading at Salomon? ==== At the moment, I'm trading a lot smaller than at Salomon, which is a disadvantage. ==== How is large size an advantage? You're kidding. ==== No, I'm serious. If a big buyer comes in and pushes the market 4 percent, that's an advantage. He still has to get out of that position. Unless he's right about the market, it doesn't seem like large size would be an advantage. He doesn't have to get out of the position all at once. Foreign exchange is a very psychological market. You're assuming that the market is going to move back to equilibrium very quickly-more quickly than he can cover his position. That's not necessarily the case. If you move the market 4 percent, for example, you're probably going to change the market psychology for the next few days. ==== So youre saying size is an advantage? ==== It's a huge advantage in foreign exchange.
By my calculations running the market above that high there would have been a real losing proposition as the core of the market wasn't supportive to it... The best plan for the big players I figured was to distribute and let the market settle down naturally for a few days before another run. It appears they came to the proper conclusions that I came up with. The people who currently run this market are not going to make any big decisions until Tuesday without a market catalyst. The shorts are all wiped out. The retail traders sucked in... Just let it drift until they panic would be my plan. I was actually expecting this move Monday and for us to just drift on OPEX... But, it was the proper day for the sell based upon the sequence. This market has rallied right through EU downgrades during upward cycles with zero reaction. Nobody really cares about the EU unless were entering/in a downward cycle. The only thing useful about news is that it increase volume making accumulation or distribution easier for the big boys. We have had so many identical sequences these last few months that people have started to recognize them... So at this point we need a sequence variation midweek next week to get rid of the people following.
Trendline? What the hell are you talking about? I was short at 1375 dipshit. If I wanted to short the trendline I would have waited until the channel was reached at 1385. That channel was not reached because primarily because people saw that it was there so the pro's made sure they were trapped. Anyway the Euro confirmed a new downward cycle the other day at close so there was nothing to worry about. Hadn't noticed that before... Why did the euro confirm a new downtrend the other day with a engulfing reversal? Who knows, who cares... It was a weak upward cycle, which means this will be a strong downward euro cycle. People just make up the EU news to explain the price action in the FX and debt markets. This week the bears are going to be euphoric and attacking EU debt for a few days.
I think this market is rising because companies are profitable and banking cash. Trade what you see not what you think.