Breslow: Traders Increasingly Have No Idea What’s Going On

Richard Breslow, the former FX trader and fund manager who writes for Bloomberg and frequently graces these pages, in his latest “trader’s note” summarizes the sheer confusion that has gripped a directionless market, in which central banks have killed price discovery and where volatility appears to be an artefact of a long one past. Hardly anything new here, but a good summary of where the “market” finds itself on the day when the first 4x levereaged ETF was released.
His full note below:
Sometimes Prices, Like a Cigar, Are Just Prices
Investors are suffering from the increasing amount of insider trading going on. Not the kind generated from golf course confidences or sifting through corporate dust bins, but from markets that just aren’t capable of trending. Because fewer and fewer market participants are comfortable answering the question, ‘What’s going on?’
A lot of this is from the much-discussed volatility suppression caused by central banks. They got what they wanted and now the negative externalities they failed to appreciate are dangerously affecting accurate price discovery. When we need it most. In their biographies they claim exigent circumstances. History will say they got too enamored with the sway they held over markets and were having too much fun.

This post was published at Zero Hedge on May 3, 2017.