Sunday, April 5, 2009

Speculators Return to Stocks, Commodities and Resource Currencies

There are times when it pays to be a contrarian, to think outside-the-box, to bet against the conventional wisdom of the crowd, and ignore the chatter of the media. Usually at key turning points, and the beginning of important new market trends, the fundamentals do not explain the behavior of the market. It is at these critical junctures, where sudden shifts in price trends can occur, - big percentage gains or losses are registered. Sometimes, traders begin to notice that price swings in the marketplace are reacting contrary to what the news headlines are conveying. For instance, on April 1 st , the Dow Jones Industrials futures surged 550-points higher from their lowest level of the day, following news from ADP, that 742,000 American workers had lost their jobs in March, a staggering decline, with 5.7-million workers collecting jobless benefits. April Fools!

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