Is it me or is the market dead today?
No they are as active as usual. Yesterday they were more active than average due to FED and BOJ releases
It’s strange for thursday, I waited for more active price movement.
Hello all…
Of course, it all depends on how we think of ‘the market’…
If we look at all existing currency pairs, that would be a pretty comprehensive assessment; the chances
are that we individually probably only watch a certain number of currency pairs, but if you are looking at
a good spread across the seven Majors, and see very little movement, then you could safely say that it
is a quiet day… Nobody here works in Forex research as a paid job, so it is fine to talk around the subject
in a relatively anecdotal way…
For the pairs and for the assets that I am watching, namely equities, some Pound and Kiwi pairs, it certainly
is a dead morning, with lots of loitering about and no conviction… The FTSE, for example, made a dash for
6900 but stalled… This may seem like ‘activity’ but it is not setting new highs, or defining a new trend…
It also depends on your trading targets: if you aim for swing or position trading then it will be a very dead
market indeed, whereas if you are looking at less than fifty pips as your target then you could say that this
morning it has been business as usual!
I would say, though, that it is no use getting clever with 'ah but it is YOU who is not looking, there is plenty
of movement in the markets today’ between members on these forums: inevitably, we all have to restrict
our sights on a selected number of asset classes and instruments to trade, and what is more, for a day
like yesterday, which promised to deliver three massively important and potentially market-moving events
(three quarterly central bank decisions in the same day (BoJ, Fed, RBNZ), inclusive of quarterly updates and
some press conferences), to be followed by such confused and comatose markets as we have seen in major
currency pairs today and in other instruments, well of course it is not only disappointing but also smacking of
extreme complacency.
I am one of many who has voiced concern on these pages with the cavalier way in which price has been showing
absolute disregard with its risk exposure in certain corners (equities to name but one), and how no amount of
fundamental spark has been taken as a ‘hint’ that it is time to drop the lot and start fresh: meaning, these markets
are awash with bank-money and they need a good 90C spin cycle, inclusive of a good rinse, and hung out to dry.
Only then we will have new clarity on price across a variety of assets, namely, what their fair value is.
Currently, we had nearly two years of EUR/USD congestion, an unresolved Oil supply issue, Majors that are
seemingly moved by central bank rate interest expectations but then move in wandering ways that have
no relation to what central bankers do or promise to do… and I could continue.
In short: the quiet that we experienced in 2014 seems to still be loitering in 2016, because what has really
changed? The Yen crosses have depreciated but not fully deleveraged their carry exposure; the Pound only
moved after the ‘Brexit’ vote but prior to that was ranging for EVER, so this is not a resolution or a new trend,
just a one-off move (like the Swiss Franc move of Jan. 2015) that does not offer much in terms of future direction
or ‘fair price’ assessment; other currencies are playing little games of small gains here and small losses there
(look at the Kiwi, Cad, and Aussie dollars), but for trend-traders have not really committed in a secure and long-lasting
way; as for equities, what has really changed? We have European and North American equities stuck at cyclical tops
for nearly two years (2015-2016) with various attempts at collapsing but each time making up those losses and being
unable to ride higher as much as collapsing. If this is not a sign of QE-bubbled markets, I am not sure what is.
This is my own personal assessment of the markets this year, and of today in relation to that, but of course the
discussion must continue, as everyone will have a different take on this.
Happy Trading.