To me, price always fall as we come into paying taxes. They are exiting their positions to pay their taxes and soon as the tax deadline has been meet, price will rally up a bit.
I agree with private banker about the state of things. But they aren't going to let this market drop just before the next election. They are not going to start doing more QE, till after the election, so we could possibly stay bouyant for a while but eventually it could happen.
Unless there is another crisses, then anything is possible.
The following user says Thank You to Rachel for this post:
Thanks for your thoughts and they would make sense if the market were full of retail investors. The issue I have with that theory is a majority of professional traders utilize business entities which are on completely different tax schedules. This also applies to all the funds out there. So, I don't think that theory makes that much sense.
As for this year being an election year, just know the market has crashed during an election year before and wouldn't be surprised to see that happen again based on many people's view of the current administration. So, to think we stay even based on that doesn't make sense but as we know anything can happen. Equities have been rising ONLY because of the global effort done by the world's central banks to provide an astonishing amount of liquidity to the global markets which has induced a large appetite for risk. Once that liquidity goes away, we will see traders/investors unwind in a hurry. As I mentioned the market (ES) has been balancing at two big areas in the last few months. We've just fallen down from the upper balance area, hit the next level where we found rejection upon the initial test. We then ran back up to the upper balance area's value area low and was completely rejected. Going into Friday's close, we saw substantial selling taking place. I think we test this lower balance area with the potential for further rejection. Should we break lower, a very low volume area exists based on the last run up which could have price literally free fall through it. We'll have to see of course.
The following user says Thank You to Private Banker for this post:
Honestly - about tomorrow's DAX move I have no clue.
But for wednesday there is a high probability to see a move
down to 6396.
Will wait for tomorrow's entry to decide which
trade shall bring some extra points.