QUESTION : Mr. Armstrong,
I’ve heard you refer to “the false move”, and have witnessed it myself. I know there is no conspiracy to ruin my day nor deter me from trading. I was just curious, what causes this?
ANSWER: The real energy within a market is always to trap the majority for then they lose money and it forces them to cover their position. If 90% of the people are long, then any news can set off the collapse. If you scare the majority, there will be no bid when you try to sell, which results in a flash crash.
Likewise, the lows are made by excessive short positions. Again, something takes place and then the news sparks a short-cover panic. Likewise, because the majority are actually short, they are forced to cover and reverse the position which creates an abrupt swing to the upside.
Therefore, markets always make the false move for that is the sling-shot that propels the market in the opposite direction. This is simply the REQUIRED movement of markets to further an important directional change.
We may see that FALSE MOVE yet with a sling-shot on a very major scale. This is the BIG SHIFT that will set the stage for markets to align in order to prepare for what is looking to be the collapse of Western Governments & their Monetary System that is now way out of control. The closings today are an omen of what is to come.