subject: A Perfect Example of Mr. Market?s Trickery [print this page] A Perfect Example of MrA Perfect Example of Mr. Market?s Trickery
Today was a perfect example of how the market tries to fool people.
I can't tell you how many articles I read this morning predicting the federal reserve would issue a new buying program (somewhere around $500 billion) for US government bonds. It seemed like it was the obvious trade. Buy bonds right?
What's often obvious in the market is nearly always the wrong! There is no better confirmation of that than what happened today in the long bond futures market.
I'm not surprised...
This morning I told my Market Trigger Alert readers not to pay attention to the financial rhetoric floating around about the US bond market, and to steer clear. Sure there was money to be made in the long bond today, but only if you lack the common sense know what you don't know...
You see, mastering the markets, and becoming a six-figure trader, has nothing to do with being right. Everyone was 'right' about the Fed's anticipated buy program, well probably more lucky than right. And to their credit they were more right then they had anticipated - Uncle Sam going to spend $600 billion instead of $500 billion. But bonds didn't go up, they got pummeled.
All market run on expectations, and the bonds have been bidding 'expecting' this for weeks, so the bulls have been buying the dips ever since. Then when the news hit, so did the mass exodus.
Let this today's video be a lesson to you: Never trade a pre-schedule Fed announcement, and don't watch CNBC - just thought I'd throw that one in there...
