Assumptions sometimes have an unpleasant way of guaranteeing one the wrong answers.
One of the big assumptions that trip up many of us is that relationships always hold. It's easy to fall into, after all once a body gets in motion it tends to stay there.
Traders in the carry trade sooner or later learn this. Gold after a 12 year run-up one day just stopped.
Years ago performer Garth Brooks had a song with a line about his significant other saying she may be in California but her heart's in Oklahoma only one day to return home from work to discover she's gone. There were lots of signs along the way. There usually is.
http://www.businessinsider.com/citi-equities-no-longer-follow-earnings-2014-5?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A%20businessinsider%20%28Business%20Insider%29#!JALaO
That's what this chart is about, a once relied-upon relationship that somehow changed. For more proof read Paul Tudor Jones' recent comments at a New York conference peopled by market heavyweights. Jones is a legendary macro trader. Here are two quotes from his talk.
Summing up this year so far:
"Macro trading has probably been as difficult as I have ever seen it in my career."
And: "What's obvious in macro is obviously wrong."
Read more: http://www.businessinsider.com/sohn-conference-live-blog-2014-5#ixzz30xHEGTOi
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