165.00 for GBPUSD & The Mammoth in the Tar Pit
When you see a market go straight up as we have seen GBPUSD do these last couple of weeks you can be assured that there is a very big player, or two, caught the wrong way, and the market is not going to let them out until they are stripped to the bone. It is certainly unfortunate for the company(s) involved, but that’s just how it works. Money knows no emotion.
In trading we call such an occurrence “a mammoth in the tar pit”. Essentially someone, or some entity that was “too big” to be wrong, is wrong, and goes under in the process. In the old days the market- place was still small enough to where everybody knew everybody and they all knew who was getting their lungs ripped out one inch at a time – or in this case 20 pips at a time — and who was on the other side of the trade. These days we often never find out who got whacked as the large institutions have gotten better and better and keeping such skeletons in the closet.
It is very definitely a good lesson to learn for all of us, because the double bottom in place by mid-March gave us an up-side objective of approx 165.00 – today’s high is currently 164.97. Even though I’ve seen it all before, the speed and breadth of the moves in the currency markets always amazes me.
And the best part about this game: once you start to figure it out, you can only get better!
Jay Norris
I’m pleased to announce that our book “Mastering the Forex Market” , McGraw-Hill 2009, is available for pre-order on most of the book distribution websites:
Nice one Jay. Hit your target as predicted.
Thanks Patience…and it happened a heckova’ lot faster than I thought when I first wrote about it. You never have enough on when your right!