The day after

There are lots of explanations as why the market reversed today.  But I think the real reasons are the following:

 

·        The pattern of “buy at rumor and sell at news”. Speculation around that FED will cut 25 bps and signal a “pause”, so, the trading before the FED decision was just a setup, once, the speculation become a fact, people take the profit.

 

·        As FED pointed out, there are still problems in the economy, thus, people do not want to push the market out of latest trading range

 

 

Now that, we know the FED decision, what is going to be the next?

 

The reverse today was very disappointing, since everyone kind of waiting the market to break out.  But, we have already passed worst case scenario, so, there is no way this market to crash again, we may see some pull backs tomorrow or near term, but look for strong rebound after some shallow pull back.

 

The pullback from Fertilizer, steal, coal etc maybe near end, if they continue slide, we can forget the trade, but if they can hold here, we can still see some up days, obviously, it will not as easy as before after latest pullback

 

China still looks good.  There are still money to be made there in my opinion