I think you just watched as the market, it would seem paradoxical reaction to certain news. Yesterday, the increase in inflation in the UK market pound went up by 50 points, while a year ago, he almost did not react to this news, yesterday's Consumer Confidence market did not react at all, but after a couple of months, he will arrange flights wounded snipe at the slightest deviation of the data emerged from the consensus forecast Reuters or Bloomberg. What's the matter?

The fact is that at different stages of the economic cycle, the market responds differently to the same news. But it's all "blah, blah, blah," as they said in a famous film.

In fact (IMHO) the market is a

key theme that loops at the moment of market analysts fundamentalist. Such topics such as the invisible part of the popularity and also quietly out of the favorite.

What is the main theme of the market? This is a topic on which talking head is always something to Bloomberg, on which there are different "Senior Analyst of the Tokyo Branch Mushito Bank" written by "fundamental" articles in magazines, etc.

Themes are periodically pop up, such as geopolitical tensions and terrorism, long-playing, as a recent topic of twins: a negative trade balance of U.S. and the budget deficit, which lasted one and a half years. There are themes that can be described as a "who's first, when the market is waiting for leading indicators, like consumer confidence, ISM, etc.

What makes the market the main theme?

The most important thing - it makes a trend. Does not even a topic as the theme score (shown here with might and main reflexivity Soros). In the near past, the euro went into aptrende about a year at one of these main themes. When this issue is in the market, everything else (performance, statements) are evaluated in the total pot market only through its prism. What is the main theme of the market? Know yourself. Betting on the U.S.. Will raise - will not be faster - slower, etc. All indicators at this time are considered from the point of view, "that the Fed thinks about this indicator.

As the comrades of the Federal Reserve has repeatedly said something like "that's job would be a little more, then you can pull and stavochku" then the market, rolling his eyes, looks at "the number of applications for unemployment benefits" and "the number of new jobs," though still half a year ago he would not move from their seats if "zhoblesy" came out at 500. If the Fed said that they need a lift, say, the industry of durable goods, then we would look for "durable goods", but with all of the work force did not pay attention to. What else influences the decision on the rates? Inflation.

What makes it more the more the people waiting recovery rates and the more zatarivayutsya dollars (ignoring the fact that inflation - a devaluation of national currency). Recall that a year or 2 ago, the rise of inflation estimated from the opposite point of view differently. Thought up to something like "increase in inflation reduces the field of instruments for the Fed in the rise of the economy" and began to sell buck.

How does the main theme?

First of all, it completely ignores all the other news. Again recall the example of the recent past and the uptrend in the euro. Look at what came out was when the bad news for the U.S.? Euro ejected up to 100 points. And the good news on the U.S.? Euro still ejected upward, but at 10 points. Poor fundamental analysts who have tried to explain it! Sick as they head. :)

I remember one such news outlets. It was the Consumer Confidence in the U.S., which came out, it seems almost 20! points above the previous value. I do not remember exactly, but I think it was the second largest growth in the history of calculation. Euro reacted brief movement down by 20 pips, and then again pulled up more than a figure. And all because the main theme was different and the market in the long run it was still there in America with confidence. He drove up on the theme evru deficit.

More like the statement of one analyst on the reaction of the euro on good data on U.S. consumption. He said something like "the growth of consumption in the United States has added to increase the trade deficit" in general, if the paraphrase "little bourgeois eat - bad, a lot of eating - too bad.

Now tezisno:

1. The main trend poses no foundation, and the main theme of the foundation.

2. During the existence of the main theme of all the fundamentals and statements, or viewed through the prism of ITS, or completely ignored.

3. Work on the news can only be on "the main theme of the trend. The market is still in most cases will go toward her, ignoring everything else.

4. Long-term primary topic usually ends with a switch to a new market.