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First, let me apologies for my absence for the last few days. I was hoping that I will get some respite after 8th August but now it seems my pressure situation will continue till mid-Sept. But that’s life, so no point cribbing.
Coming back to market, I would like to start with some interesting COT data. We would do well to remember that COT report does not result in immediate action. It just shows what smart money is doing well in advance behind the scene while the retail is distracted. The 1st chart is the S&P Emini contracts.
This week the markets were abuzz with commentators railing back and forth about volume levels or what some refer to as participation levels. One of the highly touted reasons given was Europe is on vacation. I would argue most “participants” are not only on vacation, but quite possibly more are taking a “Permanent Vacation.” And the industry itself is not only to blame for the dwindling numbers, but is acting as the travel agent selling only one way tickets.
People are leaving these markets and they aren’t coming back anytime soon. You no longer need to be a market maven to understand because anyone with a morsel of simplistic rationale now understands the game is rigged. And what was at first an assumption or oppressive nagging feeling was validated for all to see in the debacle of Knight Capital Group.