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Automated Chaos ahead of the BoJ.
[B]Automated Chaos.[/B] The European and US sessions have passed, and left in their wake a feeling of anxiety ahead of the Bank of Japan’s Rate statement that is due out from around 23:00 EDT this evening. The Global Markets entered free-fall and offered up the perfect example of what Fear of Loss and Automated Orders can do, in very short time. With over 90% of all Orders instigated by certain pre-set criteria it was little wonder that Global Equity Markets were capable of shedding close to 7% overnight, in a move that fed off its own momentum. The US$ gained the most out of the moves as Trade Desks sat and watched the Mathematical Algorithms spit out trade after trade that matched a move in one Market with a move in another. The Black Boxes have struggled with this before; they are not designed to deal with 12 times the Daily price movement in one sitting, and that enabled what may have been a healthy pull-back, to turn into Equity carnage. Maybe just as well the US Markets were closed, because they may have needed a Limit Down button, as they have in Commodities to stop the selling. Gone are the Halcyon days of trading what needed to be traded in order to achieve an objective, and welcome instead to the current environment of Instant Rewards, and trading what has to be traded to conform to the pre-written computer coding. The volatility is through the roof, and it is volatility that cannot be easily controlled, if at all. This really could be the monster that technology created, just look at the write-downs that have come from Trade Desks during the last year. Buckle-up, the Asian session could be a rocky ride. Sit-at-home Retail Traders have the edge here, there will be plenty of Wall Street's finest wishing that they could clear a space at their kitchen table and trade the Momentum, free of the Spitting Black Box. Take care tonight, do not jump in, just think about those who envy your position right now because they [I]have[/I] to be in the middle of this Price carnage. Find the price points ahead of time, review the bigger time-frame charts for overall Market direction, and wait patiently for the moves. Maybe look at both sides of the Yen, maybe Pound Short if the move from the Finance Ministry is Bullish, and Swiss or Euro Long if they move to hold. One way or the other a stronger Yen may not be what Japan wants, or needs right now. Who said Intervention??? Never...
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- Comment #1
- Edited 5:35pm Jan 21, 2008 5:35pm | Edited 5:35pm
- Ash
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- TheLFB.com
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- Jan 21, 2008 6:34pm Jan 21, 2008 6:34pm
- Guest
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- Jan 21, 2008 7:55pm Jan 21, 2008 7:55pm
- SeekingLight
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- TheLFB.com
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- Jan 22, 2008 12:10am Jan 22, 2008 12:10am
- acidguy
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- Edited 5:15am Jan 22, 2008 5:03am | Edited 5:15am
- SeekingLight
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