While the appropriate philosophy is essential for our success as analysts and traders, it isn’t something that gets much press. In our case, and that of most professionals, the philosophy would better be called an anti-philosophy. We aren’t so interested in reason, values, or causes – hallmarks of a philosophical framework — as we are in staying on the right side of the market. The “right side” of the market being defined as neither long nor short, but profitable. This is nothing new to traders and merchants from time untold. The old saying “it is not for us to reason why, but to do or die” has always been apropos for business people of all stripes.

However If there was anything new under the sun for markets it would be that the time gap between the release of real economic date, and how long it takes traders to interpret the effectiveness of government agencies reactions to that data, has virtually disappeared. For example with the U.S. stock market in a full blown bear market in early 2009, the U.S. President signed the American Recovery & Reinvestment Act of 2009, more commonly called QE I. See Figure 1. It wasn’t until 3-weeks later that the market bottomed. Back then astute investors and traders might have an idea a bottom was near, and wait for a shift in direction and momentum to confirm before entering long positions. Today three weeks would be seen as an eternity for traders to make up their collective mindset and start buying in earnest.

Underlying market shifts occur much quicker today, and it is undoubtedly because traders pay heed to the influence that central bankers exert on international markets. On September 5th of this year the Australian employment figures came out much worse than expected...