A Blog of Commentary and Ideas from an FXstreet Premium Member by 
Today’s post is really inspired by everyone !
To be more specific…everyone OUTSIDE of the markets. You know who I’m talking about…don’t try to hide it from me!
I’m speaking of your neighbor. Your cousin who lives overseas. Your checkout clerk at the grocery store. Your mechanic. Your dry cleaner. Your best friend. Your favorite barista at the coffeehouse. And on and on and on…
We are in such a unique climate, that the esoteric world of the Financial Markets is as common a conversation as homework and the ball game at the dinner table.
My analogies aside here….we have seen more activity in trying to shore up the financial stability of the U.S. and world economies in the last couple weeks than I have personally seen with one financial entity or Central Bank in quite some time!
A partial list: A couple weeks ago, the Federal Reserve, Bank of England, Bank of Canada, European Central Bank, and Riksbank recently cut interest rates by .50 basis-points. The Swiss National Bank and the Peoples Bank of China cut by .25 basis-points…while we heard nothing from the Bank of Japan at this time.
The “magic bullet” of the Bailout plan comes to fruition. Many Commodities sectors rally and fall. Crude Oil falls. Gold falls. Crude oil rises. Gold rises. The Dollar maintains is strength. The global Equity markets fall. Then rise. Then fall. Then rise.
“Around and around and around we go…where we stop…nobody knows !”
It reminds me of 1982 when I wore out my “Christopher Parkening Play Bach” album while practicing for my classical guitar recital… 
Remember my guest post on “Expectation” over on Raghee’s blog a few weeks back?
(Here is the link in case you missed it…)
I continue to ask this same question.
What is the goal and expected outcome of this coordinated effort? We have seem a multitude of “Band-Aids” come into this situation in the last several weeks in feeble attempts to heal massive wounds that continue to bleed out.
We have seen countless instances where governmental entities and Central Banks will initiate a verbal or monetary intervention to no avail. The “King” of this situation is years of the BoJ’s intervention practices being largely ignored by the markets.
I am a firm supporter of always being aware of what is going on around you as a trader. Educate yourself on these larger economic factors and what the intervening parties are attempting to do. They really can provide some insight….but always remember they take months to digest and reach the economic climate wherever you are in the world.
You do not have to agree, disagree, or act. But as I always say…you do have to REACT…because they trickle down to you and affect your trading conditions.
Intervention simply translates into a Crisis of Confidence.
Try not to let this type of toxic “crisis” alter your trading. Follow your plan…stick to your view… and maintain your convictions.
What…no comments here?…considering we are in a climate that is ripe for Intervention?
C’Mon everyone!…talk to me!
Let me know your thoughts and views on how YOU are addressing this current climate within your own trading…
Do you like it?…avoid it?… etc.
Sincerely,
- Tim -
Hi CVJ! I like reading your blog, enjoy it really, and let’s say, I would like to start a friendly discussion with this answer (You ask for it) I agree with you about some things, we have already discussed along the years: one, most fundamentals are in fact “noise” in the market, and is hard to seem them afect a trend where is one; two, I agree with you goverments seems to be using “Band Aids” right now, and in fact made several post about it in the past months, meaning a collective rate cut can hardly been seen as a response to global crisis, and more accurate messures should be taken around the world; I also agree about the REACT part: that’s what we, as traders, should do. One of the hardest part of trading, however, could be how to react to the different market conditions, and how to dettect they have changed: no doubts we must have a plan and stick to it, but better have a couple of plans (not much more than that) to fit those market conditions. If I could made a point here, is that I can not say when I can not say how, yet I can say we are about to see some interventions that will probably change actual conditions, as in fact, is starting to happen in Japan. We could be agressive, or conservative, long term or intraday traders, but in the list of things not to ignore, market interventions is in the top 5. Catch the ball and trow it back!
Regards
Val
Greetings Val, and thank you for another contribution!
I deeply agree with your sentiment here. We seem to be seeing some criteria which willl bring about a dynamic paradigm shift in the markets in general.
Conventional Intervention is certainly a possibility with the FOMC, and the G7 rhetoric and concern with the super-strong Yen. Of course, this is expected…as it is compromising their exports.
It is certainly time for Reaction and close observation in this climate.
It is advised to have an open reactionary mind than attempt any kind of manipulation to compromise one’s trading views. This would surely be a detriment to one’s self….