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Trade Desk Thoughts: Analyst Dreams Or Trader Reality
Apparently nobody told the Green Shoot brigade that the Trough part of the global business cycle takes a while to get out of, and while the sentiment may be changing, the fundamental releases take a long time to make up the lag factor between optimism and reality aligning.
It was seen in the previous session when 18 hours of futures market trade, that had stair-stepped higher, took the elevator down in two 30 minute periods after the U.S. consumer confidence numbers hit the wire.
The same thing just happened today in reaction to the ADP private sector employment numbers that posted at -473k, instead of the (overly optimistic) analyst average estimates of -388k.
How can ever-increasing weekly jobless numbers, and increasing national unemployment rates hitting 10%, lead to the private sector being expected not to post similar numbers to the previous months bloodbath in job losses (rhetorical).
There is little wonder that the market cannot get global interest to move prices in any market, in any direction, when the future outlook is as blurry as the analyst and forecasters are making it. Fair value is as elusive right now on any given market than it has ever been.
Traders are now left to pick through the ruble, looking for set-ups that can actually hold a credible review, and ahead of a 10:00 EDT ISM release, that is unlikely to lead to anything substantial to work with.
Forget year-end targets and talk of the recession ending in Q3 or Q4, because, the reality is that most analysts would stand as much chance of pinning the tail on the donkey as they would getting the Thursday close number on the S&P; let alone calling for the bottom of the most savage of global financial melt-downs that has ever been seen.
This is a traders market right now, one that is built for reactive, contrarian thinkers who are prepared to take a shot at the links that drive forex values actually holding for more than 30 minutes; because in reality that is all that is being offered right now.
Short, sharp bursts of order flows that break up a choppy market, and then reverse as quickly as they hit. Not good to look at, frustrating to look back on, but there for those who are opinion free, and ready to work with what is right in front of them, rather than trying to deal with what they want things to be.
Roll on 10:00 EDT, let's see what the respected ISM numbers can produce, we may be pleasantly surprised, those of us who live in reality that is! Yes, it is hard work to get things to fall into place, but if it was easy then the rewards would not be there.
We are here, we are ready, and we have seen it all before. Trading is a journey of small steps, that when reviewed lead to a lifetime of achievement, and along the way the twists and turns are to be expected.
Written by TheLFB Trade Team, © 2007-2009 LFB Services, LLC. All rights reserved. http://www