Your Markets Vision (This week and Beyond)

Let us see your vision and how it may play out in this week, and the next few weeks (up until the next earnings seasons).

I start:

1. Dollar would break to a new high, which would make commodity prices go down.
2. Commodity related stocks (particularly mining, energy and oil stocks) head south, pulling the market with them at least a bit lower.

3. News will come out to justify possible moves, and recruit new people to push in the direction of price. Examples of news: financial earnings may not be repeated next quarter, flus, profit taking, etc. Others may even quote: "Sell in May, and buy in Fall", "Go the hamptons", etc.

4. Money flows to US bonds for safety.

5. Truth: such moves have nothing to do with fundamentals. Just supply and demand for financial instruments moved by traders. These moves follow a random walk, predictable by the few and a source of great confusion for the rest.

I would not be surprised by a gap down tomorrow (April 27, 2009) so markets get your attention, and a move in the dollar overnight, followed by some action in bonds, and Oil.

Now your turn to tell us what your think, and to critique what I just wrote.

PS: The above text is extracted from an article prepared for publication on RFT's financialtraders blog.

 

fx market, and futures are consistent with vision described above. We will see if it will continue.

Any comments from those who trade any of the above instruments?

 

ES -2.05% and it is still Sunday...

hasn't it been a while when futures were down 2% on sunday? i hope you have loaded up your shorts before the weekend.

 

whats going on? why are futures down so much?

 

That is a good number for people who are short! Do you think it will hold? Wha about the numbers you posted in your thread? Public is bearish?

 

more selling pressure that buying in futures. they will explain it later, but it has probably nothing to do with the explanations.

 

I totally agree with your outlook, RFT!

This coming leg lower WILL be led by materials and energy

I bought some ERY and holding

 

public about to get whiplash

 

If you look at the 2% drop in a wider scope it's not that bad considering we closed at the top range of Friday's range.

 

I agree with you. We covered in AM, and sold later. We just covered again. Plan to re-enter, but this time it might not bounce back up.