How many times can you read the Fed Minutes and FREAK OUT? And then jump for joy? And then freak out again? Really??? Don't you look at this chart and wonder what kind of idiots your fellow invesors are?
It's scary out there, that's for sure. StJeanLuc pointed out in Member Chat last night that 29% of Louisiana Republicans still blame Obama for the Federal Government's botched response to Hurricane Katrina. Another 44% aren't sure whether it was Obama or Bush (the guy who was actually President at the time).
That leaves just 27% of Republicans in the great state of Louisiana who, given the clear choice of two people who could be at fault (otherwise many would have chosen Carter), were able to correctly name the person who was actually in charge.
These are the people (well, the top 10% of them) that you are trading with! They're not just irrational, they actually BELIEVE things that simply are not true. It doesn't matter what Paul Krugman says or how well he says it – 73% of those people won't believe it anyway.
As I said in the morning regarding the sell-off ahead of the Fed Minutes at 2pm: "This can be quickly reversed by the Fed or, more accurately, by Hilsenrath's interpretation of the Fed Minutes in the WSJ, minutes after they are released."
We had that little rally from 2:00 to 2:50 (see Dave Fry charts) but, at 2:50 I warned our Members that it was "All Hilsenrath on this rally," referring to the WSJ's Jonn Hilsenrath's doveish spin on the Fed Minutes. Rather than let him force us out of our short positions, we covered with FXI And EWJ longs but we quickly took losses on those and got bearish again, once the "rally" subsided. By 2:59 I was already warning our Members:
No real volume to this move – now 59M on the Dow at 3. That means this whole "rally" could reverse really quickly into the
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