Let's start here shall we. Read the article, and tell me what you think. To summarize in plain English, the way central banking works is that they control the money supply by giving lending banks (like your Wells Fargo's and such) incentive to either lend money out to you, or store it with them. When rates go up (like what our Fed does from time to time) the banks make money not lending it out and parking it in Janet Yellen's pockets, when rates are lowered the banks have a better chance making interest from you, the person paying for your house and car. And then there's the negative interest rate thing, which is almost like a penalty for banks to NOT lend money out.
So long story short, European banks now have incentive to lend money out with a rate cut, however the FTSE slid a whopping 1.8% lower, and here in the states the /ES traded up to about 2010 before plummeting to 1967.
WHAT THE HELL HAPPENED?
So before you let very talking head on the planet talk you into some fundamental nonsense about why things should have happened but didn't because of x,y,z... it's back to the same question we always ask. Do you believe there is a difference between what should have happened, and what actually happened? I hope so because there is. the /ES traded to test the previous high and then every shorting algo in the world fired mercilessly at the bid--I know, because I was shorting alongside them.
This again goes to tell you that the overall picture is still bearish and that if the news (that was bullish) wasn't bullish enough to shatter the lingering long term fear, the machines will short at these technical levels and they will win despite what is supposed to happen in the news.
However things aren't exactly tanking yet, we've sort of entered into this no-man's land again like we saw at the 1920's, where neither support or resistance is leading this trade. It's like the first monkey shot into space. Have a look because it will be hard to trade until Fed day.
This is where you learn as a trader to be patient, to stick to your trading gut, to be patient, and to know that technicals are still ruling this trade. Until one side or the other budges--whether it be in bonds, the dollar, the s&p, or even oil, expect choppy waters for a bit. Patience will be your life raft, and the forecast is "hold your positions." Whether cast, long, or short, you should let the market figure itself out before flip flopping all around here. Stick to your guns and trade with discipline.
Stay liquid my friends.
Submitted March 10, 2016 at 06:51PM by gabriel87120 http://ift.tt/24Ufx5X
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