Tuesday, May 31, 2011

Fractured market...herding can overlook anything...

“I believe that the public wants to be led, to be instructed, to be told what to do. They want reassurance. They will always move en masse, a mob, a herd, a group, because people want the safety of human company. They are afraid to stand alone because they want to be safely included within the herd, not to be the lone calf standing on the desolate, dangerous, wolf-patrolled prairie of contrary opinion.” - Jesse Livermore
Today's action while manic and somewhat amusing is characteristic of the need for market participants to herd. Notwithstanding the CME lowering margin requirements...the action was tortured. My signals are still in place and a bullish  turn for defensive assets is about to be triggered and a bearish one a most risk assets is pending as of tomorrow.

Today, silver, gold and many other commodities did not perform. Performance, it appears, was relegated to equity risk assets. A fractured market is not a healthy one. The euro was unable to get follow through and did not confirm the end of day highs in any of the equity markets and nor did the dollar fall to new lows as those highs were made. All in all, not a pretty picture. My systems added short at the close.
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