It ain’t what you do but it’s the way that you do it .

 

By Richard Matthews February 26th

Normally when I publish, writing that word still gives me a huge buzz, a column I like the feedback that I receive. The reactions are normally pretty good and most often are just people disagreeing with the view I have. Now that’s OK, as when I set out to write my aim is to make people think , to question what is going on around them . This week however I received more comments than about anything else I have written. Nearly all friendly, some very amusing and some unprintable. Not unprintable for any other reason than the comment or story contained, how shall we say it, factory floor language. In a world where most programmes have a viewer warning concerning everything from, nudity , flashing lights to outdated attitudes it is refreshing to remember a simpler time when you could call a spade a f*****  spade and not offend . This is not to say that we never offended anyone and as we would say they (normally) got what they deserve and it is hard to imagine how we would have survived the pressure without venturing into some eccentric behaviour.

The stories that I was reminded of are a testament to the fondness that Andy is held and before I move on it would be remiss of me not to give a flavour of how we worked and also engage with another Liffe legend. There can be no argument that we broked under pressure in a challenging environment, the ringing in my ears from Tinnitus reminds me every day of this. The pressure would mount gradually till every participant be they brokers, fillers, runners or observers just wanted to get the trade done and move on. We as brokers just wanted orders of round large numbers which were easy to signal in and let’s be honest easy to remember. To encourage this we would threaten clients that if their order wasn’t big enough it would go in the draw. Unwary clients would ignore this advice and subsequently find out what “going in the draw” meant. The phone receiver would be unceremoniously thrown in the draw which would then be slammed shut four or five times. After this the phone was recovered and whistle blown down the microphone. The noise must have been horrendous and imagine it being relayed round a dealing room on a squawk! All because the dealer, more often than not a trainee, had had the temerity to issue a small order. In other words he dared not to pay us enough.

Andy and I worked together at a company called LCF the acronym most accurately translated as Lose Cash Fast for those of us learning to trade, although there were some less complimentary versions which I won’t go into .The company consisted of outcasts from every market in the City. The characters are just too many to cover off in one go but suffice to say a company with an accountant, a lovely,  lovely man now sadly passed away, who would fit straight into a 1970s caper such as Minder , was an extraordinary place where the commodity and money markets overlapped . We used to joke that if we had company cars they would be magic buses – practical but outrageous with constant arguments over the fares. Many of us passed through LCF and I still remain friends with quite a few and one or two who read this column. It was in fact one of, if not the first, of many companies started to enable locals to trade. Out of the many Locals that went through its doors there was none more aggressive and hungry than Terry Crawley better known as Terry the Till.

Terry, from the very first time I asked him to execute orders was different. He wanted to win and as you can expect by his moniker win he did. He would stand alone with no backing paper taking the largest banks in the world on in the BTP pit. I later became friends with a day trader who used to trade BTPs for Nomura who was full of admiration for how big Terry’s cojones were. Towards the height of his fame a profile of him was written up in, I think , The Evening Standard describing his abilities and making a guess at his earnings …something along the lines of “ Former carpet fitter from Bermondsey becomes millionaire”. It may have been more accurate to say each month he added another million. Talking to him shortly after the article, actually listening as you didn’t really talk with him, he described how he had got dozens of begging letters before describing how one guy had written asking for his tools from his former trade as a carpet fitter . He was outraged that anyone could expect him to give something away even his old carpet fitting tools. I do however think that this was faux outrage because he was and is a decent guy and I wager the guy got his old tools. I better say that as my step-son caddies for him at Queenwood!

Terry would swear with the best of us and when fined £1000 for using the F word in the pit he would get £5000 , or five bags as he would say, out of his pocket and repeat the F word another four times before throwing the money at the pit observer saying “ That’ll pay for five” . What would he say now as the elections loom in Italy? I suspect something similar and it’s interesting to note that there are some large shorts in the market although when a hedge fund announces he is short it oftentimes means he was short and is now covering. What could go wrong in Italy a country with a dark heart where appearance matters so much but also a country that’s not known for its political stability? And as I write this the outlook in Germany is still uncertain. Uncertainty is what we love and it could be about to increase some more. The European elections last year just about scrapped through a semblance of normality, despite strong showings but “populist” parties and the markets are expecting normality to continue. Will it? I have a sneaking suspicion not but Super Sunday will decide by which time the standoff in the US 10year may also have been resolved and the shape of the yield curve determined

Elsewhere in Europe everything looks good. Well it does if you ignore the upcoming Spanish pension crisis, ongoing issues in Catalonia, Latvian corruption scandals and the reality that Brexit is going to hurt a lot of net takers , oops I mean beneficiaries, and no one really knows how to fill that gap. Dangerous times and one of the more surprising movements is that Bitcoin and other cryptos have held pretty good and there is talk that they are replacing gold as safe havens, personally I think that it is too early to say that but I am surprised how resilient that they have been and from a personal note how much interest there is in them. Oh and I did get paid on my trade so I am more enthusiastic!

Characters from the old markets are increasingly replaced by machines and the emotion and humour disappears. I’m glad to be old, it was my birthday this week so perchance that’s why I’m looking back to a time of meritocracy where a carpet fitter could become a millionaire trader by living on his wits and aggression. A simpler time when your accent, race, religion or sex didn’t matter and was not politicised. I’ve been looking back to a time when brokers would walk into a bar and order 6 pints of beer for one nervous guest. I’m looking back but also looking forward to an exciting new venture and some serious market volatility in the near future.

In the land of the blind the one eyed is ki

 

I live near Romney Marsh and my wife and I delight in taking our dog, Pepper, for walks along the nearby beaches especially in winter when they are all but abandoned by tourists. There is something Dickensian about the marshes and you half expect to bump into a latter day Abel Magwitch. We chose different parts of the coast depending partly on how hungry we will feel by the end of the walk and what will available to tuck into. Along Pett Level, near Rye, the beaches are deserted and the tide goes way out. The main attraction though is not the beach or its deserted beauty but a pop up restaurant called The Red Pig. A pop up restaurant with a difference mainly because it is run by an old broking partner, Andy Forbes-Gower.

Andy was one my first true broking partners in the futures market, a renegade with a renegade’s brain and outlook on life. If the whole world said the market was going up he, often correctly, would call the market down. Whether this was for the sheer hell of it or some inner intuition God alone knows, and as my mum would say he ain’t telling. We spent several years drinking, working , drinking and drinking some more and made several hilarious business trips to Dublin ( there is a year’s worth of stories on those trips alone).The markets were a different world in those days and we would enjoy long loony lunches together often followed by a wonder back to the floor whilst singing . I’m not proud of my behaviour but it was on reflection just boyish enthusiasm. Some days we staggered back after several hours of beer and would be unable to focus on the numbers on the screen. Andy inevitably would cover one eye with his hand, to help focus , and declare “ In the land of the blind the one eyed is King “

Beware the Ides of March

Often the markets are blind and not even seeing the reality that a Cyclops could spot. This weekend May and Merkel get together to discuss the future of Britain’s relationship with Europe post Brexit. But why? What’s the point? Merkel is so badly wounded it is unlikely that she or her proposed coalition will survive beyond 4th March and yet Mrs May feels it necessary to pay her homage for one last time. Yet if you read the UK papers you would not get any sense of Merkel’s vulnerability. Ah the 4th of March if only the Italian elections and the German vote were eleven days later, The Ides of March cliché could be wheeled out! Italian elections are elections of a complexity that only a country of Machiavelli’s birth could concoct. I’m not going to predict anything beyond the normal political chaos that involves both a comedian Bepe Grillo and Bunga Bunga Berlousconi. Really you couldn’t make it up yet Italy has dire immigration problems with over 600,000 immigrants settling in the last four years leading to a recent violent neo-nazi outrage in Macerata. Take that and combine with these statistics: unemployment of 11.2%, youth unemployment 32.7%, growth still 6% below pre-crash levels and 12.7% of families living officially in poverty. Add a soupcon of a fascist leader in the recent past and it’s a heady cocktail. The political odds looked stacked against Renzi but Italy is always surprising and may yet be sensible. All this in the Eurozone’s third largest economic area.

I do love Italy very deeply as a country and its people and I know that they are strange but please don’t change .Meanwhile little Nappy Macron sails on serenely believing for all he can his own publicity. With approval ratings dropping to below 50% and relatively little change to labour laws France is still stuck in a time warp. Again if you read the MAINSTREAM (?) press all is great and no mention of the recent elections in Corsica where the nationalist parties have made great gains. Now not to belittle Corsica it is not of overriding importance to France, in general, but remember the Scottish Nationalists and Catalans. Small problems at the outsets that became and are still major irritants. Gad about with the world princes all you like but don’t ignore nationalist problems at home as they will not go away.

If it was only Germany, Italy, France and Spain with problems Europe would be looking good. Wouldn’t it? Yeah right. It is however worse as the Eastern block of Poland Czechoslovakia and Hungary are still causing problems with their right wing agendas. I am not going to dissect the rights and wrongs of what is happening politically in these countries but it is happening and it is unsettling

Barnier, Juncker and the rest carry on as if they have all enjoyed a really good lunch with Andy and me at the Red Pig (by the way bring your own case of wine as it has no licence). Britain must be punished at all costs to discourage the others and every last penny should be extracted from the UK to enable them to carry on steering the ship of fools that Europe has become. Look at the overall picture and it is one of barely concealed chaos. As these stories unfold the spreads between European instruments are going to be interesting. Who is now the strong man of Europe? It’s a brave man who calls the price action on BUNDS over BTPs!

Maybe the crypto kids are right as so many of our traditional instruments look toxic there seems to be increased interest in these new markets. Whether it’s because of my background as a futures broker, dealing in things that don’t exist and will never be delivered, I am finding increasing interest from some serious players in the crypto markets. Hands up I’ve brokered some deals in Cryptos which is very satisfying. It would be more satisfying if my commission had been paid but I’m sure it will or someone will be featured in next week’s column! Now this is not me changing tack but just tipping my hat towards them and from someone who started with a book and pencil the joy and wonder of still being involved is fantastic to behold. As Andy also used to say when markets were particularly volatile “it looks like the lunatics have got control of the lift in the asylum”.

This one is for you Andy –never change!

The Red Pig is situated in a layby near Pett Level and is open only at weekends highly recommended if you fancy a hot drink, good food and an even better chat!

The Carnival is over

Knowledge is the power that interlinks the markets

All the facts are there but can you see them ?

By Richard Matthews February 4th 2018

I like to read, actually I like to read a lot and I am not too fussy what I read. Newspapers, Social media, information leaflets; you name it I will pretty much read it all. Well of course everything apart from an instruction manual as, of course I know best how to do everything. Which I will prove later on today when I construct an ambitious Lego toy with my grandson Joel. Not only will he end up with an incredible new toy but he will have learnt a new acronym RTFI. He won’t have learnt what it stands for as he is, as of today, too young . For those of you that don’t know what it stands for a polite version is Read The Friggin Instructions. Signs, hints, runes or tea leaves call them whatever you like are the instructions that we all read and interpret differently for trading signals.

If you read and take any serious notice of social media apart, from the jokes, I would have genuinely questioned your intelligence till recently but having seen clear trading signals in the last week in some of the more outrageous claims on Cryptos I wonder if the Twittersphere, or whatever you wish to call it, should at least be taken a bit more seriously as a contrary indicator? Increasingly there have been the “now is the best time ever to buy” Bitcoin articles. Hmmm….Long and wrong comes to mind and as time progresses ever more desperate claims have been appearing. I blow hot and cold on Cryptos , I will call them currencies when I can buy a Mars Bar with them , but I have said several times that most Cryptos are without doubt a bubble that will fade before revealing its fortune. Bitcoin has gone pop and it now has entered territory which will really test it. An old friend wrote recently that you never forget your first fast market, which is true but your first fast bear market? Now that is memory making.

I love the smell of fear in the morning

It is widely assumed in the mainstream press that brokers and traders make no money from bear markets. This may be because the classic “ head in hands “ broker snapshot is so emotive but the facts are that to most of us it doesn’t matter whether the market goes up or down any direction is better than sideways. I loved a bear market as the fear of losing is somehow stronger than the fear of not gaining and having started out and grown up in the great bear markets it was those that I learnt to trade. Which one of us can remember filling buy orders and their associated stops at the same time? Horrific conversations at the time but non the less memory making. Of course markets are easy when they just go up – we can all buy things but in every walk of life the real art is selling as the crypto kids are finding out. And when you are long and wrong the inexperienced investor panics. And last week I saw panic in the Bitcoin market and possibly the start of an old fashioned shake out in equities and Bonds.

Some will say that here may well be some rebalancing of “ portfolios “ from Bitcoin to Etherum and  to Ripple ad infinitum but that does not explain the steepness of the falls and as always is it the chicken or the egg coming first . There have been several articles written by much more astute observers than I about the inverse correlation relationship between the Vix ( the fear index) and Bitcoin which briefly shows that as the Vix rises the value of cryptos fall and indeed there does seem to be some truth in this as there is a relationship between all markets . Last Friday evening the Vix closed at 17.31 as the Dow lost 665 points whilst the 10year Treasury yield hit a three year high of 2.8%. Fridays are difficult days as you will often see small reversals of the week’s trend but it did appear that we were seeing little more than profit taking and with some reports suggesting up to $300Bln has been lost in Cryptos we may be in for a real shake out in all markets, which rising Bond yields will only hasten.

A wobbly week in all markets and it will be interesting to see whether Mark Carney is a little more reticent than perhaps he was thinking of being on super Thursday when he announces the latest monetary policy settings  and quarterly inflation report (QIR).There was a thought that a more hawkish stance may be a taken as inflation appears to be stubbornly high  and with the Fed looking likely to raise rates sooner rather than later. Now that would make sense if the Bank doesn’t want to import inflation from abroad but with the economy still not entirely out of the woods in the UK he may just hold fire for the time being but it does appear that we are getting closer to the UK’s next hike which is reflected somewhat in the strength of Sterling . In short Carney will live up to the spirit of the Carnival season  – and we may all eat and drink for a little longer whilst being mindful that lent is coming. (Ouch. I couldn’t resist trying to put that pun in and for those whose Latin is even more basic than mine Carnival is a bastardisation of Carne (meat ) Vale ( OK ) reflecting that we can all eat meat a little longer before fasting.)

It looks like that the real trading for the year is starting to take place after the jousting of the early January weeks and if the carnage , and believe me there is some carnage , from the Bitcoin debacle spills over into the Stock Markets and vice versa there will be blood on the streets. I often hark back to my early broking days and try to remember the sound advice (as well as the not so sound advice) that was given to me. Keep your mouth shut and your ears open is perhaps the best advice that I heard but now I would add keep your eyes open .Reading social media, constructing Lego models or studying charts all have the root in the same desire of knowledge and boy are we bombarded with constant information and staccato signals. The pieces are all there you just need to RTFI, oh and have a little luck.

Richard Matthews, who began his career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5

This column is the opinion of the author and does not necessarily reflect the opinion of LiveSquawk.

the drunken sailor has taken the helm

 

By Richard Matthews February 11th

Sailing was one of my great passions when I was younger and indeed I sailed the Atlantic with a bunch of friends a few years back which was one of the experiences in my life and taught me not only a great deal about myself and the natural world but also about awareness. When it’s literally a matter of life and death you tend to concentrate hard on what is happening around you and watch carefully for any changes occurring. For instance if you are thinking of diving of a boat for a dip don’t do so when Flying fish are jumping as it means that there may be a big fish , a Shark perhaps, chasing them . Watch the sky for signs of mackeral clouds Cirrocumulus as they may well be the sign that Cumulonimbus and a storm are on their way. As an old proverb says “Mackeral sky and mares’ tails, make tall ships carry low sails”. Last weekend I wrote about the markets and watching for hidden signs at the time I had been keeping a weather eye on the Vix index.

The Vix had been edging up for some time and to return to my analogy the sight of that was like seeing the first whitecaps appear on a previously calm sea during a pleasant Mediterranean afternoon cruise. Whitecaps, for the non -sailing readers are the little plumes that form on the swell of a sea which point to the wind increasing. What was, and possibly still is, hard to predict is whether the market action last week were the whitecaps forming and then followed by the squall or indeed are they are the forerunner of a full blooded Mistral. Time, as always, will tell but there were some worrying signs that this was more than a little squall and that we may be in for a full blooded storm and it appears that sadly the crew has enjoyed an overlong lunch and imbibed too heartily of Provencal Rosé.

Never ever drink when you are sailing is a great maxim and in these days of tighter office procedure very little drinking takes place at lunchtime and yet the markets moved around with all the subtlety of a drunken sailor last week. New records were created for the biggest this and the largest that and people this weekend are arguing whether it was a flash crash , a correction or whether the bears are rubbing their paws together to feast on the honey of a full blooded bear market. To me records don’t matter. What we saw and possibly more importantly what we didn’t hear last week, are the lessons to be absorbed.

Never go short in a rising market

Now let’s be clear and straight about this we all love volatility it is just what we do with it. If we lose money it’s because we bought or sold at the wrong time. End of story. I’m not an economist but I do know one thing for certain anyone who loses money by shorting volatility is due a lifetime membership to the ITC ( the newly created idiot trader club) and deserves to be financially caned. Volatility will range trade reflecting the normal fluctuations of a market and being an old hand I would always be wary of the black Swan event that skews the price violently upwards and as I learnt, and hands up to my cost, don’t ever sell premium. And yet we hear the squealing as if we lived in a piggery of ignorant traders who having been in the market for ten years think they know all there is about trading and believe that equity markets can only ever continue to the sunny uplands and volatility will stay benign. Idiots. Volatility was always going to return that was clear, and by the way we should all welcome it, just what wasn’t clear was what would trigger the move.

I watch the Vix pretty closely and it had been range trading nicely over the last few months but it had been edging out of its trading range towards 12. What was this gentle spike up telling us? It wasn’t telling us to sell it (unless you were long) it was warning of a storm coming just like the first white caps and breath of wind when you are sailing warn you that the weather may be changing but unfortunately it appears that the crew had been on the lash and didn’t look around for other signs and as such failed to see the barometer dropping.

The move was started back in December as Bonds started to retreat and was encouraged by the US jobs data that came out on Friday 3rd February which prompted the Devil fall of 666 points. This move carried on and as I mentioned at the beginning the talking heads discussed records. Well records mean nothing and what was telling was the influence of those that said very little. There was no calming talk for the markets from Jerome Powell in his first days in the job and Carney , surprisingly ,instead of pouring oil on the water poured honey on the breakfast of the Bears by mentioning that rate rises were more imminent than had been first thought.

The Central Banks have been brewing up and administering the crack cocaine of QE for so long the markets thought it would never end and there is a generation of traders now sitting at the boards that have grown seeing this action and in their ignorance thought that the markets were always benign and sold volatility. Well it has ended and we are entering the choppy waters of normalisation and it feels like the central banks have decided that’s it regardless. Not one soothing word from the Central banks so batten down the hatches guys we are in for a rough time. The temperatures is rising and the fever is hitting but this time I think the signs are that market may not be catching a cold but about to experience full blooded cold turkey.

How rough a time will tell but we will continue to see sudden spikes in volatility and sell offs and all the old phrases such as dead cat bounce are being wheeled out. Personally an expression I loathe and being topical and sticking to the seasons I think a pancake bounce will be more appropriate and having practised tossing them this weekend in preparation for Shrove Tuesday I can tell you they don’t bounce that well.

Meanwhile Europe lurches along with the mainsteam press ignoring little Napoleons problems in Corsica, Frau Merkle’s growing problems both politically and with industrial scandals such as VW and Deutsche bank she looks increasingly vulnerable. And then there is Italy. Well Italy and its forthcoming elections are worthy of a whole book let alone a footnote to a column. I love a coincidence and how about the Italian Elections and the vote on Merkel’s coalition both being held on March 4th Be under no illusions we live in a period which is only going to see volatility increase, please don’t go short the Vix, and if you don’t have the inclination to play safe haven instruments such as gold could be for you. Be very wary of the damage that last week did and remember as the sage of Omaha; Warren Buffet said “when the tide goes out, you see who is not wearing swimming trunks.

The forgotten cries of old London don’t echo in Davos

 

By Richard Matthews January 31st

Dealing rooms were always meant to be noisy and that was always the attraction of them to me. From my very first day I loved the shouting and the laughter, in short I loved the buzz. A room of 400 or 500 traders or brokers banging phones and shouting seemingly random words was and still would be heaven. “BundBobleshatz” from one desk, “Cable in fifty” from another and the triumphant “you’re wearing them “. Brilliant fun but sadly those shouts are being confined to history  by electronic trading and in history books they will soon reside along with the street cries of old London. How many of you remember the newspaper sellers calling “Starnoosstannerd” or “all the winners” trying to tempt you into paying for the Evening Standard (or the other papers The Evening News and Evening Star) on your way home? I suspect not many of you recall the newspaper sellers but hopefully some remember the cries in the dealing room….many of which I can’t put into a written piece without getting censored!

I hear the cries oh so rarely these days and normally uttered by a colleague as he tries to impart some excitement and urgency into his young team of brokers. There is still noise, oh yes but of a different kind. The constant babble of the TV in the background is there but in the end the sheer repetitiveness of the rolling news channels becomes an irritant. Not the news or the presenters, although some do grate after five minutes and I am much too pleasant to name names, it’s the adverts. The News cycle changes, the interviewers and interviewees change but the adverts do not. The same jingle, introducing the same asinine message, hour after endless hour. At least with the old cries there was a randomness to them both in time and content that kept you aware but not anymore. This last week more than most I’ve kept an ear cocked to the TV channels to hear what wonderful pearls of wisdom were being uttered by the great and good in Davos.

Davos the conference where a Marxist ( John McDonnell) will happily attend paying upwards of $50,000 for the privilege and then $1200 a night to educate the world’s thinkers that the problem in Venezuela was not one of socialism but one of not enough socialism. An interesting thought process. But then I guess if I could get the taxpayer to fund me attend this giant party I would be there. It was however a slightly different jamboree this year once Donald Trump appeared, and let us be honest stole the show. Like him or loathe him he is the world’s most important man and he does, clearly, enjoy being so. Despite the seemingly randomness of his tweeting he is getting on with business and again declared that America was open for business. It amuses me when I see the righteous indignation of Europe at his effrontery in saying this. I mean France doesn’t look after France first and neither does Germany. Well they do, they just aren’t quite so upfront and open about putting their countries first.

Each time I glanced up to the screen during the week there was yet another member of the elite be it a youthful Jamie Dimon or Larry Fink chief executive of BlackRock being interviewed in what looked like a set from a Christmas cake decoration shop or one of those model shops I loved as a kid selling miniature snow-capped trees as I tried to make my model railway more exciting and appear to be going through The Rockies. The babble turned my mind to consider and have another look at forecasts around the UK and US economies and see if I should be listening or watching something more illuminating. I wrote recently, at the turn of the year about forecasts and whether the forecasts were worth the paper they were written on. At the bottom of this column there is a table of forecasts. I am not economist by any sense of the matter and some would say I am much closer to a monkey with a dartboard when it comes to economic forecasting. But what to me comes clear is the disparity in forecasting the UK economy and the US , for example Mme Christine LeGarde , the hint may still be in the name , and her highly paid academics at the IMF were pretty much on target with the US forecasts but in common with most forecasters were miles off target with the UK. Is this because of a deeply held bias against Brexit or because the US economy was easier to forecast even with the unproven maverick Donald Trump newly in charge. Looking at these numbers the only link is that they were universally awful forecasts for the UK and pretty good for the US. Taking a further hike down forecast avenue I wondered if the US economy was easier to call then the year end closing price on the S&P would be relatively easy and did a little research on some of the top US houses on this. Wrong! Look at the table.

If economic forecasts are so flakily I wondered if it was worthwhile taking a more generalist approach to the jamboree and try and get a “feel” for what is concerning the uber powerful. It feels to me that there was a certain smugness at the economic recovery that we are enjoying which, let’s face facts, is being driven by ultralow interest rates and QE. If as rates start to edge up and QE dries up the economy stalls we will then need to see how clever the great minds are. Some worries over the power of the FANGS were expressed and time will tell if they start to get their houses in order.

As I wrote earlier Trump stole the show and in a TV interview with his friend Piers Morgan broadcast on British TV he gave, to my mind, the most interesting interview ironically to mainstream TV and shown on a Sunday evening .In an interesting dialogue, as you would expect, he reiterated the strength of the American economy, was warm towards Brexit and critical of Europe who he thought, had treated the United States very unfairly when it came to trade. Trump said “I’ve had a lot of problems with (the) European Union, and it may morph into something very big from that standpoint — from a trade standpoint.” And he continued “(The European Union) Had done many bad things to the United States”. A clever thought provoking interview but as you tend to get with Trump one that gave the impression that America is open for business if you want to do business on his terms.

Apart from the sabre rattling from Trump there was little out of Davos to get really excited about and four weeks into the New Year I hear a new call …get the monkey a dartboard. The betty is already busting the forecasts of “it won’t go above $1.40 as that’s its natural high ….. Where does this leave us all as traders? I am not saying ignore predictions but just put them into context and question whether the bank/ organisation making them has an ear of corn to grind or whether they really are independent. Secondly as, if not more importantly, watch the flows and stops . If a price has had a ceiling of, say $1.40 for a long time just be aware that there will be stops around the figure … “roundaphopia” I used to say, and that there will be increased volatility as we break on through as witnessed by sterling last week. The market doesn’t lie as for politicians I’m not so sure. Maybe Trump is different, but then Trump isn’t really a politician.

By Richard Matthews November

Richard Matthews, who began his career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5