CONFESSION IS GOOD FOR THE SOUL
Yesterday was a tough day for me in all honesty. I shorted the two markets I mentioned then sat back and watched huge open profits turn into losses. Such is the life of a trader. It hit me particulary hard yesterday probably because my trading has not been good during the transition I told everyone in here I am making. I have seen this happen so many times. However, we cannot impose our own "conditions" on the markets. They are going to do what they will regardless of what we as individuals want them to do. Watching the very short term swings is difficult emotionally, there is no real answer other than to get over it. However, at times it can be stressful which is why this business is so difficult.
As I listened to CNBC this morning and the dialogue of how to explain how the market was getting hit so hard overnight, I had to laugh once again. The explanation was that it was a reaction to the FOMC minutes. How could that be they were released yesterday and a clear rally followed, messing up my shorts literally! Now we are being told the reaction is today, well which is it? Of course there is an explanation that nobody would dare bring up. Perhaps the Fed released their talk to "come clean" then bought futures right on the news to stop what should have been a decline. If this were true, this could be the real reaction to it and not the governments manipulation of the reaction. Of course if they really were to come clean they would completely open their books to reveal all the futures trades they have made, but that will never happen. I do think some day when history is written about what the government did in this crisis it will come out that they bought futures markets heavily to slow things down. It could be decades though before that comes out, but it will.
Of course we will never know which is correct and it really does not matter. When yesterdays lows went today, after that late reversal yesterday, that was a sign of weakness. Whether or not it was done from the above scenario, or some other one is irrelevant. When you get days like that with the late day saves, where the lows go the next day, it is a sell signal. Now we have had basically 3 short term sell signals in 2 days, so the short side is the right side to play here.
I thought I was in business in my Swiss trade when I saw the EURO collapse overnight, but it barely moved. This to me is a sign of relative strength so I exited that trade with a small profit a few minutes ago. With the EURO down 260 and it down only 45 something was amiss, and I was not going to sit around to find out what. It is a trade against a big uptrend, so hopefully we get a bounce to setup another entry. I do think we are on the verge of a good move down in currencies, up in the DX and down in stocks.