They're all preaching a similar theme in current mkt turmoil.
You need to be aware of which type of market condition you’re stepping into.
Is it directional/ranging/consolidating/liquidating etc?
If you got a set of tools to get to work in specific (or your favored) conditions, then cool….if not, it might pay you to sit aside & wait until you can get a handle on the flows/risk/temperament out there.
A lot of rookies attempt to climb aboard differing market conditions with the same tools they use for one specific event. Example: they’ll use a trending mechanism to try trade a ranging market pulse & vice versa etc etc….little wonder they get zapped.
The current conditions, where extreme volatility caused primarily by unwinding/liquidating/repatriation money being pushed thru the pipes is proving almost impossible for retailers with little experience to navigate via intraday models.
Liquidity is tetchy & patchy at best, which will knock onto your brokers (spreads) ability to fill & honor market touch pricing and/or stop order facilities.
Re-quotes, delays & refusals will be much more visible in these emotive conditions. They’ll be looking to protect their positions/risk bias just as much as you, so in the most part they’re not entirely to blame if you fail to get your desired price either in, to pare or out.
It’s essential to avoid attempting to pick tops & bottoms in the current environment. Tempting though it might appear, unless you’re extremely versed in reading flows, you’re more likely to get yourself badly beaten up out there.
Stocks are directing this show & when they’re good & done stomping all over everyone, keep an eye on EURJPY for a clue to maybe catching a back wind up the ladder. That pair is a decent gauge to investor risk appetite/aversion. You can then take a snoop at the $ instruments & Yen (incl the $Index) for a little geography.
I wouldn’t be surprised at all to witness a violent kick back up a ways on one or two of these instruments, albeit a temporary lift, to test the mettle of the liquidating traffic. Once the orders (& stops) dry up at these multi-year extremes, prices will need to bounce, if only to allow sales to resume at keener value levels.
Most of the pro forums/desks/chatter channels are bawking "intervention" since middle of last week (both equity & currency) to try put a line underneath this mess, & have re-iterated again overnight:
"We reaffirm our shared interest in a strong and stable international financial system. We are concerned about the recent excessive volatility in the exchange rate of the yen and its possible adverse implications for economic and financial stability. We continue to monitor markets closely, and cooperate as appropriate"
G7 Fin Mnstrs/CB Governers
Threat (stick waving) can often be as effective as actual presence....I guess we'll see before long
Interesting times.
