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Posts by "speculator"
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Posts by Anonymous "speculator":
well for starters, some banks been making huge trading profits recently especially goldman. betting at severe lows for currencies/markets was an easy game for quick money as many markets were below equilibrium prices and not sustainable e.g oil. but it will get a lot harder for traders now that obvious mispricing becomes increasingly difficult to spot. i will expect trading profits for the banks to fall in h2 which will probably help bring stocks down a bit anyways.
but if u think about it u have a 33.3% chance in making money on a direction of a market. a lot of bets may be won due to chance, TA and fundamentals.
did anyone expect quantitative easing in 2008?? probably not too many but 0% yes. now that is what u call a shock and that's what helped push the stocks and inflation linked instruments up and dollar down. had we have known for sure quantitative easing and other central bank measures occured we would not get such historically large volatility and short sharp corrective moves. if markets fully anticipate price movements with high accuracy why would there be such volatility? i dont think so. it is likely to be more gradual and not so corrective. we would not have such a huge rally if markets were rational, forward thinking and able to predict future events with accuracy.
markets remain irrational a lot of the time but what helps cause all this volatility is unpredictable events which market participants as a whole cannot forsee.
its shocks that tend to cause short and sharp pullbacks and that you can never fully predict. for example, lehmans collapse was not anticipated and neither was the actual depth of global liquiduty freeze. now unless we get some kind of HUGE shock i cant see stocks pulling back in excess of 10% from current levels. shocks will come im the form of rising interest rates, rising oil prices, removal of ultra loose monetary policy etc and a wave of bank defaults.
challenges welcome
im waiting for cad1.15/dollar might have to wait some time
thanks