Kill Boredom doing Boring Stuffs

Nothing is more boring than Market comments, those stories of past action and settled battles that only give the losers more sorrows and the winners more auto-satisfaction. We all know how the prices have progressed during the trading day, for instance we know the SPX opened at 1075 and closed at 1064 on Friday, but we DON'T know precisely WHY it occurred, we just have assumptions on the reasons of the move and those are just interpretations of the news. I believe there's a strong trading bias here. I guess most of the people believe that Trading is just about betting on news, if they're positive the price goes up otherwise it goes down. Forecast them accurately and you'll make money. Unfortunately it's not that simple. I think this belief is fed by the crowd of journalists and market commentators writing the headlines we read all day. That's their job to explain the market action and this asap after the fact and whatever happens. Some days, it really looks like the journalists have a stock of good news and a stock of bad news handy and as the market action unfolds the former or the latter feed the arguments accordingly: "The S&P 500 dropped because [bad news 1] [bad news 2] despite [good news 1] and as [bad news 3]". All in all it lets the impression that the news drive the prices, which is not always true. To say that the game of trading is about betting on the actual figures or news compared to the anticipation of the markets participants would be a better statement, but I think it's still not totally right. When the markets are in a mood to fall, they will fall whatever (OK OK almost whatever...) the news are. The only statement I'm considering true at that stage is that when there are more guys desperate to buy than guys desperate to sell, the price goes up and vice-versa.

Actually when I think about it, there's something more boring than Market comments : it's to write market comments... And maybe that's why I decided to write one today... The thing is the markets was soooo boring last week and the prospects for action this week remains pretty weak, that it could keep me awake. Kill boredom doing boring stuffs... typically the silly things I manage to do... Seriously, the main reason is that it will allow me to catch up with the markets as I've been staying aside for a week or so. We'll see later whether or not I will post on a more regular basis some market comments, I will do if my trading (account) benefits from me writing them and if it helps in the framework of my "Operation Absolute Trader" that aims to make me improve my trading skills, knowledge, focus and determination. I can't promise anything, we'll just see. For now, here we go :

Next week, the first week of September is promising in terms of action with the guys back from their holidays, all tanned all broke, for what I call every month THE Week : US ISM Manufacturing (Wednesday 1st), Non Farm Payroll (Friday 3rd) but I think we might see some anticipations as early as this week from frontrunners, probably guys who went back earlier from their holidays due to a bad weather (or because they went broke earlier) that could give some momentum to the markets. In addition, the highlights this week are the Durable Goods report on Wednesday and Home Sales (Existing on Tuesday and New on Wednesday). The weekly jobless claims report on Thursday could be also a mover and a decline is expected this week (491K from 500) after rises over the last three consecutive weeks, a bad surprise could impact the dollar (negatively I guess, I'm not sure now...). The US and UK GDP revisions on Friday will be also interesting to follow (double dip or sloooow recovery?). I almost forgot to mention that Helicopter Ben will give a speech entitled "The Economic Outlook and the Federal Reserve’s Policy Response” at the annual Jackson Hole Symposium

This morning in Europe, the Eurozone PMI (Purchasing Managers Index) that assesses business conditions by sectors and determined on monthly surveys of European executives decreased. In the manufacturing sector in particular, PMI weakened by more than expected (55.0 vs 56.1), likely driven by a drop in business confidence in Germany while the drop in services was more limited (55.8 to 55.6). It could assert to some extent prospects of a slower growth in Europe and the release of the data sent the EURUSD briefly below 1.27 before the pair retraced back above that mark and participants fights around all the European morning. The 50-SMA currently at 1.2735 was crossed on Friday and offered this morning some resistance, and the failed test may confirm the break. Suddenly, at around 3.00 pm BST (British Summer Time), the pair fell and headed south of 1.2650, and stays around 1.2665 as I write. Tthe equity market too dropped in the meantime as the SPX fell below the 1070-level after it opened higher thanks to M&A optimism (it's now fluctuating and back at 1072 now). I don't know the reasons for this sudden move down, the Lord of Trading knows. For now, it looks like the drop of the EURUSD stopped at the 23.6% Fibonacci (I have it around 1.2350 while my figure is not very precise, I plotted it a while ago). The European stock indices, the Eurostoxx 50 (SX5E) and the German DAX ultimately closed with slightly up, close to their respective 50%-retracement that seems to act as a support, at least for now.

The USDJPY broke its approximate 85.30/50 intraday range and is trading now at around 85.20 as among the plethora of Japanese officials' comments, the latest being PM Kan has exchanged views on several issues with BOJ's Shirakawa  and "forgot" to mention about intervention prospects. A last word on Australian elections, it looks like we head for another hung parliament but it looks like the proposed mining tax is dead and it sounds like that's a slightly positive news for the sector.

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FYI As this post is published: SPX 1072 // SX5E 2661 // NKY 9116 // DAX : 6010 // EURUSD 1.2669 // USDJPY 85.24 // XAUUSD : 1225