Buying the News....
The problem with most funds these days is they like to use fundamentals as a way to gauge their entries. Most traders do the same.
I will say this again until I am blue in the face that "you must know the Fed policy and what central banks are going to do to maintain what is called price stability and keep volatility at its lowest point that they can. You may be one of these hard-line die hards that think the central banks only have so much firepower before they lose control of the delicately balanced market.
Once again this is NOT the case. Please understand that this is NOT going to happen.
There is simply too much ammunition at their disposal for them to manipulate the markets to where they want them to go. You recently saw that in Oil in my short and long at the desired zone. You can clearly see that the price is staying roughly at the area which they determined to be fair market value for the consumer.
These maco analysts think that the central banks don't understand this principle of how the markets need to be in order to maintain debt levels and to keep the markets from crashing. The simple answer to that is, they do understand this. Not only do they understand this but they control the areas where this happens.
In days of old market participants in the early days of trend following were able to capitalize on the central banks' distortions of the markets where the volatility was high and the swings in the markets were big enough to be able to make good alpha returns. This is where George Soros and the like made their money.
This is NOT the case anymore. If you follow those types of strategies now, at least in the developed world markets you are going to take a beating. Plain and simple. Forget the days of old. They are gone and will not likely return again in my lifetime or yours.
That does not mean that the markets are not confined to ranges that you can make money from. You have to be able to figure it out and when you do there is the opportunity. For example, I took a short from last Friday's news from the Fed knowing that most traders are expecting a much higher dollar that will crash the market. At least that is the talk on the street. So I went short as you can see below. The dollar will not likely rise much higher from where it is now. So this is the place you can safely bet on a short, knowing that you likely have central banks behind you. Meanwhile, the traders who are using fundamentals to place entries are generally out of the market at this point or are in serious pain.
I will say this again until I am blue in the face that "you must know the Fed policy and what central banks are going to do to maintain what is called price stability and keep volatility at its lowest point that they can. You may be one of these hard-line die hards that think the central banks only have so much firepower before they lose control of the delicately balanced market.
Once again this is NOT the case. Please understand that this is NOT going to happen.
There is simply too much ammunition at their disposal for them to manipulate the markets to where they want them to go. You recently saw that in Oil in my short and long at the desired zone. You can clearly see that the price is staying roughly at the area which they determined to be fair market value for the consumer.
These maco analysts think that the central banks don't understand this principle of how the markets need to be in order to maintain debt levels and to keep the markets from crashing. The simple answer to that is, they do understand this. Not only do they understand this but they control the areas where this happens.
In days of old market participants in the early days of trend following were able to capitalize on the central banks' distortions of the markets where the volatility was high and the swings in the markets were big enough to be able to make good alpha returns. This is where George Soros and the like made their money.
This is NOT the case anymore. If you follow those types of strategies now, at least in the developed world markets you are going to take a beating. Plain and simple. Forget the days of old. They are gone and will not likely return again in my lifetime or yours.
That does not mean that the markets are not confined to ranges that you can make money from. You have to be able to figure it out and when you do there is the opportunity. For example, I took a short from last Friday's news from the Fed knowing that most traders are expecting a much higher dollar that will crash the market. At least that is the talk on the street. So I went short as you can see below. The dollar will not likely rise much higher from where it is now. So this is the place you can safely bet on a short, knowing that you likely have central banks behind you. Meanwhile, the traders who are using fundamentals to place entries are generally out of the market at this point or are in serious pain.
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