Comment by Amit Singh on June 2, 2011 at 5:27pm

Doc ,

 

Can you explain how do choose between two possible explanations of the market move

1. They were building the buy positions by spreading the news like greece  and pulling Eur down and in process trapping the people who were selling at lower levels  and now they are taking it up for the postions

 

2. as you have said, players are trying to build sell positions as much as possible before NFP.

 

I know that intentions will be revealed tomorrow but tomorrow it will become a market commentary which is off limited use. What I want to learn is how do you choose the most probable explanations  from a number of explanations or is it just a gut feeling?

Comment by Amit Singh on June 2, 2011 at 5:44pm

Doc ,

just to repeat your words "The volatile moves before NFP is really unusual". Can this be also be interpreted as market may be heading for something different which is contrary to expectation?

one more question to look at the same issue from a different perspective , How do I know now that my earlier deduction that market is dropping is till valid if market is not behaving as expected so when do I say , "ok , I was wrong , market did not behave as I expected , may be it is doing something which I have missed or have not seen before" ? 

I am trying to learn market reading as you always say that we should develop the learning skills 

Comment by Dr. Sivaraman on June 2, 2011 at 5:45pm

Dear Amit

Quick moves are flase moves in the market- so you can judge whether they gained levels quickly or dropped quickly.if they gained quickly - ie they buy less and gain more levels.So it is gaining levels to induce short covering and then slide.

Regards

dr.sivaraman

Comment by Dr. Sivaraman on June 2, 2011 at 6:04pm

Dear Amit

during last week of a month and first week of a new month they make volatile moves- that happens to be monthly trend reversal time.When they gain the levels quickly and drop all the way in a short span of time - that is known as extended stop hunt - when they make an extended stop hunt on the upside then the expectation is the quick downward move - ie they hit all the stops on the higher side and then drop with least selling pressuire.Today they have done it using breaking news but they made the quick rise -so their intention is expected to drop.

besides this way they attract higher level buy orders from the traders out of fear - then they can fill them .before dropping from 1.49 they did similar move.

Regards

Dr.Sivaraman

Comment by Amit Singh on June 2, 2011 at 6:05pm

But doc , given the times I have noted the drop and the rise happened almost in the equal time so how do I say that rise is false or drop is false?

Comment by Amit Singh on June 2, 2011 at 6:06pm

also if the quick drop was false and they have retraced , doesnt that mean market should go up now?

Comment by Dr. Sivaraman on June 2, 2011 at 6:17pm

Dear Amit

if your otherway observation is correct then the market should go up.But I have given the expected moves based on my observation.

Regards

Dr.Sivaraman

Comment by william lee on June 2, 2011 at 6:33pm

Dear Dr. 

if after the NFP data it show a grow sign, should i try my luck for buying it for a short term?

 

Comment by Mariano on June 2, 2011 at 8:57pm

Great assessment Dr. Siv. !!!

Comment by ATF on June 2, 2011 at 9:25pm

Dear Doc 

Kindly suggest some higher levels before a drop in GBP after NFP?

Regards

ATF. 

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