The market has a habit of over-reacting to anomalous numbers "as if" they were in fact real trends...
The ISM number today is a good example... Faced with a dismal macroeconomic picture...market players will pick a "good data point" and trade off of it ALL DAY!
NEVERMIND THAT TOMORROW THE NUMBER WILL BE REPLACED BY A MORE NORMAL AND REALITY BASED NUMBER THAT SHOWS THE MACROECONOMICS MORE CLEARLY...
Everyone knows that US "manufacturing" is in a long term decline to the vanishing point... There may be an blip now and then...perhaps based on aircraft or military spending...but the long term decline of manufacturing in the US is well established.
THE CHINA CONTAGION SEEMS TO BE REAL... CHINA IS A KEY PLAYER IN THE US BOND MARKET WHICH IS THE MOST DANGEROUS PART OF THE ENTIRE "HOUSE OF CARDS" ON WHICH THE US ECONOMY DEPENDS...
SOONER OR LATER, THE CHINESE WILL SCREW UP... AND THE US BOND WILL FALL...AND FALL HARD. WE SEE THE TREND IN THE DOLLAR WHICH HAS PASSED 130 ON THE EURO, THE OLD DANGER POINT, AND IS NOT LOOKING BACK.
BUYING INTO MARKET OVER REACTION TO ANOMALOUS DAILY NUMBERS COULD BE A WINNING STRATEGY FOR THE TRADER.
