posted by Trader No 1 on Feb 6
People keep asking me on Twitter ( Follow Me On Twitter) why I have suddenly decided to go long on the FTSE and US30 instead of constantly selling.
The reason is this. Its matter of psychology and is not 100% percent scientific but holds as good as any other theory doing the rounds at the moment. The markets have seen an awful lot of terrible data recently and funnily enough everytime new data surfaces the markets seem to shrug and ignore bad news – its as if the bad news is already priced into the market price. Conversely when good news surfaces the market rises modestly but thats about it.
As of the time of this posting we have seen awful data from the UK and Germany and the market has “rolled with the punches” and now there are rumours of better than expected US Non Farm Payrolls. If these materialise then perhaps they might be scope for a couple of hundred points on the DOW and hence I thought it might be worth taking a punt.
That having been said, do keep a few hedges in place just in case……:-)
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