Market Schizophrenia

DionysusToast · Jul 28, 2012

You really have to marvel @ these markets and the media hoopla that surrounds them....

DionysusToast said:
OK - so the Sky is NOT falling in....

Here we have a potential balance area within a balance area. (daily chart)

The longer term balance area we have been in since May suggests a continued moved down below 1300.

The shorter term balance area calls for a move up from a point below 1330 – somewhere that is considered
cheap, relatively speaking. Plenty of people are short from the last 3 days so.

At this point, it's probably worth considering how damn schizophrenic the markets really are.

Friday 20th, then the 23rd & 24th there really was a lot in the media about how this was "the end" and hey presto a couple of days later & we are back where we started.

So - was the down move a bunch of smart people in funds re-positioning their long term positions? Did they then have a think again and move it up? Doesn't seem very smart to me...

Was risk off for 3 days and all the uber-investors realized that actually risk should be on again? Not so uber, really are they?

Not to say I don't get caught up in this as much as anyone else. I don't watch any financial news but you can't really avoid this stuff - CNBC, Bloomberg et al assigning some 'cause' to the up or down move of the day and brining in a pundit to say the sky is falling/sun is shining.

It's all just people trying to anticipate what people are going to do. Trying to understand it would drive you nuts because the whole thing IS irrational.

And long may that continue.

DionysusToast · Jul 28, 2012

BTW - this is a repost of something in the S&P500 trading thread.

I thought it might spark up a discussion on how ridiculous these moves are if you consider the way the media explains them.

Shakone · Jul 28, 2012

Think you need a few more lines on your chart, I can still see the candles

I do often have CNBC or Bloomberg on in case of announcements, but I sometimes think it might be damaging.

What is really irrational about the market? The explanations given by the media are irrational, I agree with you.

BeginnerJoe · Jul 28, 2012

If the media is capable of giving a correct explanation, don't you think they would put their money on it ? I don't understand why anyone would have the expectation of the media being better traders than anyone else. Where would they get such abilities from ?

DionysusToast · Jul 28, 2012

Shakone said:
Think you need a few more lines on your chart, I can still see the candles

Indeedy~

Shakone said:
I do often have CNBC or Bloomberg on in case of announcements, but I sometimes think it might be damaging.

What is really irrational about the market? The explanations given by the media are irrational, I agree with you.

Well - the post might make more sense now I added the 2nd pic

What is irrational is the moves and the concept that we hear a lot that 'smart money' has changed it's mind and made the most recent move.

Perhaps I expect too much from 'smart money'. Looks more like paranoid money.

wackypete2 · Jul 28, 2012

Shakone said:
Think you need a few more lines on your chart, I can still see the candles

I do often have CNBC or Bloomberg on in case of announcements, but I sometimes think it might be damaging.

What is really irrational about the market? The explanations given by the media are irrational, I agree with you.

CNBC are nothing but cheerleaders. Listen to them when the market is in a triple digit down day but is in a small pullback.... they jump up and down about how the downturn is over, then markets are off the lows, we are in a late session rally,etc....

CNBC has plenty of historical analysts that attempt to explain what has already happened and often they hedge themselves by saying it could've been this, that, or the other thing...well DUH, could have been anything!

We all know if it was just that simple to give a reason why each turn of the market came about we would all be vacationing in our multi $million villas all year long, etc...

arghh, lol DT, don't get me started with the "risk on", "risk off" bullsh1t. Define it however you want they are just the current buzzwords that every analysts has to use to sound like they are in the know.

Peter

Shakone · Jul 28, 2012

Yeah the nice move up. Pin bar innit

Wacky, CNBC is funny to listen to at times. I especially like when they get those 4 traders on, and one has picked the exact wrong time and direction to go in, is long and staring at a chart that looks like a cliff, and he has to stay he's still confident and is adding to his position. Risk on, risk off ... classic. I base all my trades on Sorkin's fair value to be honest.

DionysusToast · Jul 28, 2012

wackypete2 said:
arghh, lol DT, don't get me started with the "risk on", "risk off" bullsh1t. Define it however you want they are just the current buzzwords that every analysts has to use to sound like they are in the know.

Peter

Well - that's red rag to a bull....

So - let's go there.....

I agree - it is nonsense - some brainiacs decided risk was off for 3 days and the market moved down, then on day 4 they realised it was all just their imagination and it do buy back in again.

The media is one part of the issue - but the moves themselves are not the product of rational assessments of where long-term money is safest because it doesn't change day to day.

It's just a herd doing herd-like things until the market stretches a bit far in one direction and suddenly it's 'cheap/expensive'.

I don't think risk was off for 3 days at all - that implies rational decision making...

Shakone · Jul 28, 2012

DT do you think there's a hidden secret (isn't that a tautology) agenda with all these media stories?

Nice new avatar, but I preferred the Clint Eastwood.

eighteen · Jul 28, 2012

Because there isnt a market at the moment, the market has decoupled from reality.
heres what caused the past weeks ramp in eur usd.
wednesday nowotny comes out and said, esfs looking at getting a banking liscence 100 pips eur usd, then draghi comes out and says ECB will do whatever it can, booom 120 pips eur usd.
friday, draghis comment has not been denied, keep on rallying, end of friday market realises it has been lied to and sells off eur usd.
today schauble has said none of the above will be implemented expect a selloff

The markets are running on pure hope, they want more qe and more ltro, any sign this might happen rallies the markets, your mistake is trusting the long term chart at this moment in time, the market isnt making any sense at all.

headline comes out algo gets hold of it, we are having a rally. UK GDP worse than expected we should expect a drop in the ftse.... Same day draghi says that, Ftse rallies 1.3% can you be for real?

AAPL misses earnings, big sell off, next day meh lets rally.

the markets have left reality. CNBC are just talking heads trying to talk their own book, they will continue to just keep pushing out their crap.

DionysusToast · Jul 28, 2012

Shakone said:
DT do you think there's a hidden secret (isn't that a tautology) agenda with all these media stories?

Nice new avatar, but I preferred the Clint Eastwood.

I think the only hidden agenda to market-level stories is filing time. It's always retrospective. I simply avoid it now.

I do think there's plenty of hidden agenda with stock specific stories but I think the media are being played as much as the rest of us in that respect.

VielGeld · Jul 28, 2012

I read Google Finance for teh lulz.

As a result of getting into trading, I've slowly stopped reading all news because it's turned out to be a load of crock most times. Even legitimate media outlets are all bull if you ask me -- they attempt to sound relevant by posting stories that get some social buzz going, when not much happened in reality.

I used to subscribe to The Economist and other business stuff, and read the newspaper religiously. Now I've done away with all that and haven't noticed the difference, to be frank.

wackypete2 · Jul 28, 2012

Shakone said:
DT do you think there's a hidden secret (isn't that a tautology) agenda with all these media stories?

Nice new avatar, but I preferred the Clint Eastwood.

LMAO, I just noticed it, err, interesting, considering the recent debate and avatar war

OK, back on topic...

Peter

Shakone · Jul 28, 2012

eighteen said:
Because there isnt a market at the moment, the market has decoupled from reality.
heres what caused the past weeks ramp in eur usd.
wednesday nowotny comes out and said, esfs looking at getting a banking liscence 100 pips eur usd, then draghi comes out and says ECB will do whatever it can, booom 120 pips eur usd.
friday, draghis comment has not been denied, keep on rallying, end of friday market realises it has been lied to and sells off eur usd.
today schauble has said none of the above will be implemented expect a selloff

The markets are running on pure hope, they want more qe and more ltro, any sign this might happen rallies the markets, your mistake is trusting the long term chart at this moment in time, the market isnt making any sense at all.

headline comes out algo gets hold of it, we are having a rally. UK GDP worse than expected we should expect a drop in the ftse.... Same day draghi says that, Ftse rallies 1.3% can you be for real?

AAPL misses earnings, big sell off, next day meh lets rally.

the markets have left reality. CNBC are just talking heads trying to talk their own book, they will continue to just keep pushing out their crap.

When you say 'the market wants', what do you really mean? Who is it that wants this?

eighteen · Jul 28, 2012

Well mainly big banks because it benefits them directly... alot of hedge funds because the market goes up when we get QE easy to make a killing, the talking heads want it too. Well i shouldnt say the market Wants it, but when the market expects it, or gets a hint of it, it shoots up because it knows what the outcome should be

wackypete2 · Jul 28, 2012

VielGeld said:
I read Google Finance for teh lulz.

As a result of getting into trading, I've slowly stopped reading all news because it's turned out to be a load of crock most times. Even legitimate media outlets are all bull if you ask me -- they attempt to sound relevant by posting stories that get some social buzz going, when not much happened in reality.

I used to subscribe to The Economist and other business stuff, and read the newspaper religiously. Now I've done away with all that and haven't noticed the difference, to be frank.

At one time years ago I had all the latest newsletters, wall st journal, daily email buzz letters, etc.... I ditched them all (still read wsj once in a while) when I realized none of it really did me much good. Many of the authors are analysts or journalists, not traders. It hit me one day that I had the best handle on my daily trading, not someone else.

Peter

DionysusToast · Jul 28, 2012

eighteen said:
Because there isnt a market at the moment, the market has decoupled from reality.
heres what caused the past weeks ramp in eur usd.
wednesday nowotny comes out and said, esfs looking at getting a banking liscence 100 pips eur usd, then draghi comes out and says ECB will do whatever it can, booom 120 pips eur usd.
friday, draghis comment has not been denied, keep on rallying, end of friday market realises it has been lied to and sells off eur usd.
today schauble has said none of the above will be implemented expect a selloff

I disagree with this. I don't think that is what caused anything. I think these are the reasons given for the moves in retrospect by the media.

Of course, it is true that the things you mention did happen. It is also true that the market went one way and the other. Still, it's not proof of cause.

I think sheep caused the moves. Simple as.

What I see on the ES (and it should be clear from my charts if you understand profiles) - is a market that is simply rotating around value, getting a bit expensive, rotating back down, getting a bit cheap, rotating back up.

There has been no change in the perception of value. The market is moving sideways if you look at the big picture. Nothing changed last Friday, nothing changed this Thursday.

Just my view.

DionysusToast · Jul 28, 2012

Shakone said:
Yeah the nice move up. Pin bar innit

:clap: :clap: :clap:

PMSL!

DionysusToast · Jul 28, 2012

wackypete2 said:
At one time years ago I had all the latest newsletters, wall st journal, daily email buzz letters, etc.... I ditched them all (still read wsj once in a while) when I realized none of it really did me much good. Many of the authors are analysts or journalists, not traders. It hit me one day that I had the best handle on my daily trading, not someone else.

Peter

Yup - all that stuff will do is stop you from being able to make a decision.

DionysusToast · Jul 28, 2012

wackypete2 said:
LMAO, I just noticed it, err, interesting, considering the recent debate and avatar war

OK, back on topic...

Peter

I am toying with a number of 'less spammy' (not my words) avatars that still have a subtle Jigsaw theme..

Market Schizophrenia

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