Quote from riskfreetrading:
Let us see your vision and how it may play out in this week, and the next few weeks (up until the next earnings seasons).
I start:
1. Dollar would break to a new high, which would make commodity prices go down.
2. Commodity related stocks (particularly mining, energy and oil stocks) head south, pulling the market with them at least a bit lower.
3. News will come out to justify possible moves, and recruit new people to push in the direction of price. Examples of news: financial earnings may not be repeated next quarter, flus, profit taking, etc. Others may even quote: "Sell in May, and buy in Fall", "Go the hamptons", etc.
4. Money flows to US bonds for safety.
5. Truth: such moves have nothing to do with fundamentals. Just supply and demand for financial instruments moved by traders. These moves follow a random walk, predictable by the few and a source of great confusion for the rest.
I would not be surprised by a gap down tomorrow (April 27, 2009) so markets get your attention, and a move in the dollar overnight, followed by some action in bonds, and Oil.
Now your turn to tell us what your think, and to critique what I just wrote.
PS: The above text is extracted from an article prepared for publication on RFT's financialtraders blog.
