After reading the reports from all sides, the unanimous view is that Powell admits that inflation is not temporary, suggesting that the withdrawal of loose monetary policy should be accelerated in the future, and the pot of market collapse should be thrown to the Fed's austerity expectations.
Is the media's view true? Is the logic of financial market really that simple and clear?
If you have been involved in international financial market transactions for a period of time, you will find that it is really complicated, and the seemingly simple and clear logic is difficult to move in the market. Losing money is really a matter of minutes, and making money seems to be more difficult than going to heaven.
After this period of frustration, everyone will have a cognition; Fundamentals are invalid, not as effective as some simple technical analysis, and will regard the news of fundamentals as the main scam and become a tool to harvest retail investors.
I used to have the same idea. After a long period of market baptism, I realized that the financial market is an expected game of future price trends.
In other words, fundamental information or news will become a parameter of market pricing and be quantified by market traders. Especially for large institutions, they have the most advanced financial technology tools and top quantitative trading technology. When we all know the news, they have quantified all kinds of results into their trading strategies.
No matter what news the market finally presents, it can be reflected in its trading strategy. Unless it is a black swan event that the market has never experienced, for example, when the epidemic just broke out last year, the market experienced unprecedented events such as liquidity exhaustion and negative oil prices.
After understanding the core issue of market expectation, we can make a judgment on the expectation.
Often, after a sharp drop, the market continues to ferment, but it is difficult for the price to continue to break effectively, or to rise rapidly after a drop, which is basically a signal that the interest is exhausted. When the market begins to lose interest, it should reverse the previous short-selling thinking as soon as possible and start thinking in the direction of reversing the dilemma. At this time, it is often that bulls continue to wash dishes, suppress financing, and prepare for the next pull-up.
On the other hand, after a big wave of price increases, the market became more and more optimistic, and one outrageous bullish point spread in the market; The basic thing to do at this time is to leave as soon as possible, and the market may dive at any time. The main difference from the bottom is that the height of the top is unpredictable, because the madness of human nature is unpredictable. Don't touch the top at will, it may explode at any time. Like this year's thermal coal futures.
This is my view on the news fundamentals through this speech by the chairman of the Federal Reserve.
The above contents do not constitute investment advice and operation guide, for your reference only!