8 Minute Read

Some Days….June 2nd – 2014

June 3, 2014

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There are some days in the market that are amazing and amazingly volatile.  These days are fun, exciting, and days we old traders (side note: I can’t believe I just said old) like to tell stories about.  There there are days like today.  Often time in the market we know when we will have one of the story telling days and others where we know that nothing is going to happen.  The story telling days are fun, the boring days will make you an old and boring trader.  Today was the latter.  What I am referring to is what drives the market in the first place.

There are three things that drive the market:

1) Behavioral: This is fear and greed

2) Technical: Study of price action

3) Fundamental or economic activity: The stuff few want to talk about but need to know.

When we have a huge day in the market, either up or down that is typically caused by an economic report.  Today we had no economic reports and the market literally did nothing.  Tomorrow, we have a different story as you can see below

forex

Tomorrow starts the G7 meetings that go for two days.  These meetings are when the Central Bankers from 7 major economies come together to discuss (drink Long Island Ice Teas) how to fix the economies of the world.  They also discuss changes to the economic systems, monetary systems, and fed monetary policies.  It is a major event that we hear very little truth come out of but is entertaining none the less.  The rest of the economic reports are average to important economic reports and can all drive price action.  Due to the amount of economic data I expect much more movement tomorrow than today where we saw a paint drying day.

Studying economics in college may be boring, seeing how it can impact your bottom line is exciting.  One thing I also tell my students is to go to www.forexfactory.com each day and identify what economic reports are coming out and then do that for two months.  After two months of doing it daily people typically feel a ton more confident in not only dominating the economic discussion at thanksgiving (what you don’t have those?) but also being prepared for the market each and every day.

Thanks

Matt Justice

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