Trader Warns "Time Won't Heal These Market Wounds"

Tyler Durden's picture

It’s a thankless task to try trading when it seems that all of the relevant inputs are unscheduled exogenous shocks. But, as former trader ansd fund manager Rich Breslow notes, we often have no choice. The Bloomberg editor points out notably that the market reacts and only considers what it means afterward.

When’s the next one that’ll set us off and running? We’ve learned that breaking headlines haven’t shown the courtesy of necessarily waiting for normal business hours. And unlike run-of-the mill economic news where there’s at least the possibility of some sort of dispassionate analysis, the news we’ve had this week comes laden with all sorts of preprogrammed baggage.


To make matters worse, the market, even more than nature, abhors a vacuum. Trading a storyline with so many unknowns and so fraught with emotion, requires that new developments continually feed the beast. Or it bites back.


Markets can trend, range trade, and correct. But one thing they can’t do under the current scenario is time-correct. The minute they stop moving, a powerful, even if short-lived, impulse takes over to reevaluate, cherry-pick and average down. Even if you’re sure the story hasn’t run its course, it takes real moxie to remain exposed to the other side of trades you were very comfortably holding for the previous weeks and months.


We’re all leery of getting caught in over-crowded trades. Nothing feels more teeming than new trades predicated on emotion. Even if you feel very strongly about the subject. This is a be nimble, very nimble, environment when we’ve been rewarded time and again for buying and holding. Traders will need skills that have atrophied over years. Another reason we are years away from “normal.”


To further complicate things, while many believe that the latest information confirms what they suspected all along, the ultimate import isn’t at all clear. Other than that investors don’t like uncertainty. Will the legislative agenda get bogged down? Maybe. But from what we’ve seen so far, some additional time to prepare viable proposals with actual details isn’t necessarily a bad thing. If the Senate uses the time to get some nominees approved so they can get on with running the government, we might in fact be better off.


The most important thing to watch if you are going to handicap how this all plays out is whether the Republican caucuses in the two houses of Congress stay unified or fracture. Mitch McConnell and Paul Ryan are every bit as vital to this story as is the special counsel. You’re highly unlikely to learn how this plays out before the end of today.


This is one of those rare days that most Fed members are thanking their lucky stars that they don’t have to speak. While I’m dying to know what they make of all this, I’m working under the assumption that their tune wouldn’t change. But the definition of data-dependent may be in flux.

One glimpse at this chart and we suspect Breslow is 100% correct...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Cordeezy's picture

Hard to trade when you have HFTs beating you to the punch on every trade also!

Creepy_Azz_Crackaah's picture

HFTs run by the computers in the Fed's basement.

Ghost of PartysOver's picture

HFT's love to run stops.  It is were the moeny is.  Get the Traditional Traders and the Mom and Pops leaning in the Direction of the Fundamentals and then plow 'em over like a Muzzie driving a lory.

Russdiamon's picture

Too many people getting short this last drop. I wonder how many stops they hit on the move up.

DavidC's picture

Watching the charts on a minute by minute basis, today has been pure algo action.


meta-trader's picture

you can add an extra 1500/USD week after week in your income just working on the internet for a couple of hours each day... check this link...

A. Boaty's picture

Route trades thru IEX to avoid HFT ripoff.

DavidC's picture

Presumably this encompasses Bullard talking bullshit and causing a market ramp even though he's talking crap.


DavidC's picture

Apologies, I meant bollocks, not crap...


spastic_colon's picture

this too..........what a crock after all of the central bank repression and phony inflation numbers they have the balls to publish this.......

and why does the fed have a .gov address??

Russdiamon's picture

If you want to know when another drop is coming you need to check out this guy. He called the drop the other day in advance. I don’t know how he does it. But he’s great at it. Check it out

spastic_colon's picture

why dont you just post his calls here for us when they happen? sure would save us all a bunch of time.

DavidC's picture

Member for
1 week 17 min

Fuck off.


cougar_w's picture

Time heals all things.

It is called forgetfullness.

Iconoclast421's picture

Time wont heal them but central bank money printing will.

francis scott falseflag's picture












S Spade's picture

These market have been fixed for some time, arguably since the advent of "funds".  Price used to be determined by many individual buyers / sellers, now it's a few current holders, insiders and institutions/funds, who collude to throw shares back and forth in a zero sum game to jack/fix the price to force short sellers into covering (far above the real supply / demand intersection) and bolster their quarterly paper valuations.  There are no willing buyers to cover large volume sales at these valuations.

Grandad Grumps's picture

Wounds? "Tis only a scratch"?

The market has been a corpse since at least 2009. The ONLY action we see is the Fed's (and complicit international banks) arm jammed up the market's ass, using the dead corpse as a puppet.

The Dogs of Moar's picture

Wider than a church door?

Deeper than a well?

Hongcha's picture

SNAP earnings and the Wednesday 5/17 action may have put a top in.  I'm waiting for Monday to be like today before I take a short stack.

oDumbo's picture

I wonder if those of us who studied markets and economics in the 80s and 90s should have foreseen a time when all central banks around the world would figure out they could just start printing into infinity and force the markets to call their bluff...which logically they really can't, but so far they are defying gravity.  It will take some massive event to change the financial trajectory the world has taken.  That said, there is a finite amount of goods, even with tech enhancements, that are stored or consumed, so simply increasing the value of these goods in first world markets has its limits.  I assume that assets in smaller economies, with less ability to manipulate currency, will eventually be considered grossly undervalued.  I'm just trying to figure out how this ends, given that it defies all laws of economics.  Hyper inflation should be the answer, but with tech muting labor costs, where will the inflation come from?  Oil?  Not likely.  Food?  Not likely?  Where will rabid inflation take place that could have an effect on US, China, EU?  We can always shove it back down the throats of Brazil, etc.  It is confusing to understand, but I know this will end badly.