“We have a bias toward wanting to be right, which is not objective. The way the brain works, we tend to give ourselves disproportionate amount of credit when we’re right and when we’re wrong, we tend to disproportionately blame outside and external factors. We externalize failure, we internalize success, which is not accurate, which the a priori fact of that is and this is a Freudian observation although these cognitive biases have built a business around the simple fact that as Freud said, we’re not accurate observers of our own behavior, we’re not designed to be.” – Gio Valiante
Our focus today will be on starting to scale out of our RTY short from the FOMC and Q3 OpEx ramp. We are open to anything but all in all, we would expect to see some kind of bounce, especially as China comes back from holiday next week. As we like to say, most traders would do a lot better if they focused on trying to catch 2/3% moves rather than 20/30% moves. it’s simply a function of number of occurrences. Furthermore, if O/N continues to trade heavy, there will be some very interesting trades setting up into the cash open.
The other key thing to discuss and review will be how markets will react to the Thursday data dump especially seeing the misses we saw yesterday. As discussed on Twitter, after those prints, slow and steady, you would have to expect usd longs start/continue to unwind across the board… especially, expect gold higher and yen lower to continue. All about Thursday now.
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