Deciphering today's economic data with any confidence is almost impossible. It's frustrating, contradictory and open to subjective interpretation on book-bias dependencies. The violent swings in the VIX confirms the confusion. That said, short-term trade-direction is simplistically a function of one overriding factor - money flow. Following the flows of cash is key. Unusually for this time of the year, investors are carrying excess cash relative to the traditional asset allocations. Asset-price change then becomes a function of liquidity. Less liquidity or volume in the markets exacerbates the price change.
Liquidity, certainly in the month of August was unusually thin. The only true indicator for traders in these circumstances is an understanding of the credit markets which professionals use to gauge strengths or weaknesses of an economy. For interest in the month of August US credit markets fell off a cliff to levels last seen in late 2008.... Speaks volumes..
Liquidity, certainly in the month of August was unusually thin. The only true indicator for traders in these circumstances is an understanding of the credit markets which professionals use to gauge strengths or weaknesses of an economy. For interest in the month of August US credit markets fell off a cliff to levels last seen in late 2008.... Speaks volumes..
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