Stock Flare Up Provides Early Decoupling Opportunity
Stocks are once again doing their own thing, detached not only from credit, but also from FX. The early ramps in stocks on little volume which is the HFT Monday morning pattern we have all grown to love and expect, saw no validation in either bond spreads or the carry trade. In fact, stocks have decoupled from the AUDJPY by as much as 8 points early on. As usual, there is nothing in the factual arena to validate this kind of move. Incidentally, there is now scientific evidence that validates the fact that HFTs distort markets. We will post on it shortly, although anyone who have been trading stocks over the past year is more than aware of this.
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