It’s all about money
The market participants were “dissapointed” by yesterday’s FED move. FOMC cut by only 25 bp both rates. It’s strange why the market expectations changed during the last few days even after the stronger NFP report last Friday. I think the answer is simple. If the FED meets always the market expectations after the decision is announced the price movements will be very small and so will be the big boys’ profits. High volatility comes only after “suprises”. So the game plan is simple. Before the FED decision or major news release Big boys shift the market expectations in one direction. After the event they are “suprised” by the FOMC move or the actual data and they jump on the breeks and mak e “sudden”U-turn. All the public is surprised both by the data and the price direction change.
What can we do to avoid losses cause from such surprises? Next time when FOMC meets don’t read the expert’s comments but the real data. Or just don’t trade during major events.