It isn't and even if it works for a while, if cash to flow is created from debt, the resulting fall wipes out and more the gains made (those mechanisms have been noted they are probably structures nested in those fat tails).
As I noted, it is possible to get out on RSI, but it seems most ignored or tragically didn't even know about these indications. Trying to trade in forex on confidence is a recipe for disaster.
Those who made money from the cheap dollar carry trade of the past year or so have only partly recovered any losses and most of those assets are still worthless (let's not even mention the tech bubble). The analysis I suggest in these articles, is one which says there are computational mechanisms at work which have their own validity.
If the market could be controlled, then it would be at 18,000 right now. It isn't last time I checked. Even the great minds of Obama and his team have found the limits of exquisite structures to try and control money flow (assuming that is what they are doing).
The best one can do is look for signs of the mechanisms within the markets. And this blog tries to take a deep, and daunting effort at looking at the source and structure of money flow, forex, and one of its destinations and recursively sources and structures as well, the stock market.
But let us look at what confidence means because confidence right now means a rise in Euro and a rise in stocks. I remember months ago an analysis from a well know forex broker which said with feeling surely now the dollar will get back in sync with equities.
I have been suggesting that confidence is only the mistaken belief the market can be controlled and this state of being out of sync is a symptom of this. When a real recovery happens as I have described here, along with deficit reduction by Obama then dollar should rise and one can ask what exactly is valuing Euro. I believe Obama can do this...
Let us talk about the time element. Confidence boosts Euro boosts stocks for a while, lack of confidence brings them back down again, producing the range. The problem is it is not confidence really. It is a belief in business as usual, control of the market by money flow.
True confidence I am suggesting is what a true recovery I believe in will bring. That will be confidence. The other feeling is more like temporary relief, which quickly collapses into despair as the market does exactly what it wants. By want, I mean exactly what the market's computational mechanisms do.
Update 7/26: note how doom and gloom has turned to total optimism. But I am not without optimism, because as I said I believe the real recovery is in the market.
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