Last time out when I reviewed the final week in November it was pretty clear what the main driver of prices was – it was perceived performances. Good performances were getting rewarded strongly. And bad performances punished.

But not always entirely accurately which is why I underlined perceived – very few people do extensive scouting or know what they are really looking for so you have to expect a large amount of inaccuracy when judging how well a player really did. 

Often for example a player can get a bad FI score and/or appear to play badly, but if you dig into it you can clearly see they aren’t a million miles away from a win at all.

And the reverse can be true – a player can smash a 300+ score and appear to be doing really well but actually be extremely lucky and a diligent researcher will know not to expect that again soon.

This is good – it’s exactly the sort of market where good research gives a trader a key advantage because that information allows us to exploit these common failures of judgement. Simply put we can buy good players most people think are bad cheaply. And sell overvalued players people want for a premium. Good conditions.

But in the last week those conditions have not continued – we now have a different market environment again. 

It’s far from the panic of early November, but there is a clear bleed out for many players at least in Blue Button price terms. How much credit you really give that is questionable. As we know by now – it only takes one reasonably sized holder to crush that price. 

A player can appear to drop 2-5% say just from one person’s decision to sell. That can bounce back very quickly if those shares are bought. The question is – how many people are dragged down with that seller? How many people think “oh no – it’s happening again!” and join that seller disposing of shares cheaply?

It’s hard to know. We now have some market depth information in that we can see the top 5 prices but this is far too thin to be truly useful and it’s why I was a little lukewarm on it. It is useful for grinding out a few extra pennies when buying or selling but as genuine market depth information that tells us what is really behind that Blue Button or Red Button? Pretty much useless. We need to be able to see all of the bids/offers.

You do have the Average Offer Price which always looks much healthier and probably closer to the real value of a lot of the players. But as per my immediate reaction to these on the Live Blog – there is a trust issue with these. 

The entire purpose of this number is to help people get over the volatility of the fact that one person can drop a price. Yet it’s so obvious how this Average Offer Price can be gamed and therefore there is zero trust in this number. This is a mistake – a trader should not be able to place unrealistic offers to pump this price. 

If we look at Hudson-Odoi for example I can currently Offer him for sale at £3.05 to pump his average offer price! Yet anyone buying knows they won’t have to pay much more than £1.20. FI caved to social media pressure and actually increased this ceiling as traders wanted to be able to manipulate these prices. In my opinion – this totally backfires. 

Even for the traders who think pumping the average offer price is helpful to them. I don’t think people care about Average Offer Price because they know it is too easily gamed.

Have we ever seen anyone celebrate the rise of an Average Offer Price? I have not.

This needs reverting in my opinion – FI should enforce realistic offers only that may actually get matched – then we can see an Average Offer Price only from genuine sellers. It would be lower yes – but we could trust it more.

It is important to have a number we can rely on – because the Blue Button price is still dragging people’s emotions around more than anything else. And yet we know this number is total garbage as a reflection of value. 

It represents the feeling of the most panicked, stressed out trader who is willing to sell at rock bottom. It does not reflect wider opinion – but it can become self fulfilling as more and more people are dragged into that panic mindset. And you can’t just dismiss these people as mentally weak – this isn’t easy to just brush off even if we like to think we have ice in our veins.

When it comes to the type of player that is dropping this week it is a real mixed bag – and I think it just reflects popular players that people have rather than anything else. The more people hold them – the more likely at least one of those people decides they have had enough and drops their price. And then if one goes… the next can follow like dominoes as the pressure mounts up.

We are still unlikely to see a recent winner or big scorer on the sell list. Wins will still boost confidence and keep people in. But we will see players who are very close to winning but haven’t being sold. And if we find ourselves with free money available from dividend wins or similar – it’s just an undeniable opportunity to get great players cheaply.  

And you can see some rises for good performers – Jones, Chiesa. Pogba who hasn’t done a great deal to deserve that except hit a transfer rumour although as discussed the price was getting so low that he was probably due a come back at some stage.

But in a market like we saw last week we aren’t going to be seeing many Blue Button price rises. There is just no reason to do it – we all know we can get cheap bids matched. It’s not that no confident traders exist – we can clearly see the trades going on – but it’s all happening on bids.

This creates a situation of strong downward pressure on the blue button, but extremely weak upward pressure. In a market like this – blue button prices can only really go one way. Except when a player does something so obviously remarkable that people see a need to buy them heavily right this moment. And it will take a lot to make that happen – nobody is going to pay more than they have to right now.

So what we are really looking for when it comes to success is a closing spread that shows demand for that player is picking up. And that is much harder to see on the platform because the price graphs do not track the spread.

I’ve said plenty of times recently that what we need more than anything is tight spreads that permit trading. On that score – we definitely have a much better situation than we had weeks ago. This is hugely encouraging although is probably missed by most.

You can get sell prices on most of the top 200 and many of them are pretty reasonable spreads. It may be that the blue button price had to dip and the red button price had to rise a bit and they met in the middle. Which will be cold comfort to holders – but this is exactly what needed to happen in many cases.

This is key – if this stays true then my stress levels are pretty low overall. Blue Button price falls are depressing but when you know how easily those prices shift around and that just one person can be behind them you know not to take them too literally. Why would I let other people change my perception of what things are worth on this short termist basis? I spend enough time working that out for myself and I’m going to use that rather than anything else.

There has been plenty of people who have wanted to sell players but haven’t been able to this year and that demand to sell has been backed up creating a big downward pressure. Maybe some of them are thinking “it hasn’t all just bounced back immediately, I’d better just take my hit”. Maybe it’s the right decision for them, who knows what circumstances they are dealing with.

My feeling is that at some point, probably not far away, we likely hit some kind of equilibrium where those who do want out are out and it’s the sticky traders left. Prices will stabilise at a level that will continue to be well under what I call “True Value” (i.e a rational dividend return for the price). And after a period of price stability and probably a few changes from FI – people will come and collect that value because that is human nature. 

Coming back to what is moving prices – winning and losing is still going to have a lot to do with it for the foreseeable.

We’ve had one of those weeks where lots of the winners, particularly of Star Player have been those sort of “spoiler” or punt picks that aren’t widely popular. This happens from time to time and there is nothing wrong with it – but it is unfortunately timed in a delicate market.

People wanted to see big dividend wins for traders and what we’ve seen is… Gervinho, Payet, Giroud, Zubeldia, Mallo, Doan, Ben Arfa, Grillitsch. Meet your Star Players of the week. This is just unfortunate at a time when the mood really needed some big ticket winners, but that’s just the breaks. I am sure this has contributed to the feeling of gloom.

I can only point to 4 winners in the last week out of 21 outfielders who you would call popular or well known – Insigne, Pepé, Messi and Lukaku. That’s pretty miserable and badly timed during a fledgling recovery. It’s even sparked talk of “is winning FI too hard” or “should I change to a full IPD strategy”. I’ll discuss that more below but spoiler alert the answer is a firm no.

For the next week – of course performances are still going to be important for maintaining/boosting prices and closing spreads. And if probability asserts itself some more popular winners should come through and that could be some cause for cheer. 

Whilst confidence remains flaky though there may be no escaping that blue button price drag even for good players. All it takes is one holder to lose confidence to make it happen. 

Although we can decide how much we let that person influence our actions. I am personally much more confident in my own judgement of quality versus price than the fluctuations of the Blue Button.