1. An interesting aspect of the recent rally is that we've had two back to back in a row smallest ranges of the previous 50 trading days. Also, the longest period without a x day max in the last 20 years or so. Neither is especially indicative of exultation to come. As if on cue, after 50 consecutive days of at least 20 points or more ranges averaging 60 points between high and low each day, we had the two smallest in a few months, just so that the opponent will always be on the wrong foot.

2. It is amazing how the market encapsulates everything. No news on the presidential outcomes in the last day had an impact on the market, as the prediction markets already had taken the incumbent party off the charts at 20 to 1. However, all the senate race outcomes which were close to 60-40 on the prediction market had an immediate 1/2% impact. I watched all the moves relating to the election closely with updated ticker prices on intrade, and the market is the most efficient thing in the world. At 9:00 pm, trade sports had it 99% for Obama, and then as every senatorial race probability changed, the market would move an immediate 0.5 with Japan moving 1%. Alfred J. Nock always said that mankind will always gravitate to the least amount of effort with a very small sigh, and the reaction of the Japanese market to it, with an immediate drop of 3% when the victory was formally declared at 11:08, and then a 4% rally in the last hour was their sigh. The revulsion gave way to exultation. One believes that the reaction of the market to the election is an example of some deep underlying principles of human behavior, especially relating to resilience, and anticipations always being worse than realization. Hope springs eternal, but one has not figured out a good way to quantify this. Some hypotheses from the readers would be provocative.





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