Market Update
To be perfectly honest, I still don't understand the price action on EUR/USD from 4:00 - 11:00 AM EST. I've spent the day searching for answers, and all that I can come up with is that this madness had something to do with options expiring. The double up and down whipsaws make very little sense from a technical analysis viewpoint. However, it was a "Quad Witching" day, which could account for the irregularities in price action.
Zerohedge: "Between quarter-end, quad-witching, and the index-rebalancing, activity at the NYSE soared today. More than triple the average of the last few weeks, today's volume was the highest since the US downgrade last August - over 13 months ago - and given the downward pressure in prices into the close it seems more motivated sellers than buyers locking in anticipated Fed/ECB gains." http://www.zerohedge.com/news/quad-witching-day-sends-nyse-volume-soaring-highest-over-year
The increase in participation should cause an increase in volatility levels, and it may also lead to a decline in risk appetite. My favorite way to trade changes in risk appetite is the Australian dollar, because the Royal Bank of Australia (RBA) currently has interest rates set at 3.50%. For those of you who don't regularly trade the Aussie, I recommend visiting the RBA's website: http://www.rba.gov.au/ and reading up on monetary policy. I also recommend this video done by Chris Lori: http://vimeo.com/48913337 I have no official opinion or recommendation as to his trading seminars or courses, but he offers interesting fundamental insights on the Australian economy.
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