Markets Have A Way Of Making Pundits Look Stupid

But it is lazy for traders to blindly follow a narrative. A narrative works for as long as others (or trend-following algorithms) follow it. If the logic behind the narrative persists, it can be lucrative. It’s another trend to follow, and trend following often works. But trends can change rapidly and almost always without warning. On Friday, we saw an example of that trend change. Today we saw similar trend changes between the pre-market and the start of trading, with a couple of bounces in-between. As of now, we are near the day’s highs, but who knows how we will close.

There was one piece of vindication in my piece from Friday. The final paragraph led with something prescient:

“That said, various technical indicators are pointing to major US indices as heavily oversold. That could result in a sharp snapback rally…”

I just wish I had finished the paragraph with “starting in a few minutes”.

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Disclosure: The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the ...

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