Sep

3

Gold1. In Thursday morning quarterbacking, the one day move in gold from 956 to 978 showed that there were still enough animal spirits left to break the round number. But the web is is always changing. After the 30 most similar movements in gold, stocks declined about 0.3% the next day.

2. There have now been seven daily excursions above and below, three round trips above and below Mr. Big Round in the last month. But how would one test in an elegant fashion if it's consistent with randomness? The artful simulator comes to mind with randomly selected numbers.

V Hugo3. I am reading a biography of Victor Hugo. And the similarity of his life, productivity, creativity, and life force with that of Verdi and Beethoven, comes to mind. What trader, or what company, shows a similar life force, and at what stage of his, or its, career?

4. The market move on Monday is an example of the anticipation is worse than the realization, as elegantly limned with a bow to Mr. E, by Mr. Moe.


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12 Comments so far

  1. david higgs on September 3, 2009 8:52 am

    Try this on for size, last June the market failed the head and shoulders and took off and got all the shorts running for the hill from 875 to where we are today — just ask Art Cashin. Lo and behold we have another head and shoulders formation as we type… when working with random numbers, be sure to throw in Planck's Constant. Best, d

  2. michael bonderer on September 3, 2009 4:20 pm

    [Q3] S0r0s.

  3. john donaldson on September 3, 2009 7:22 pm

    G____man S_chs and B^ffett come to mind

  4. Matt Johnson on September 5, 2009 1:23 am

    I really don’t look at charts the way you do.
    I see gold as a breakout of a pennant and I’m waiting to see if we test, then break, or fail that level. The psychology around the pattern is all I need; the market tells me what to do, and when to do it, all I do is listen and follow.
    With all due respect, I see you’re trying to get us (me) to think for ourselves (myself), but, you’ve got to give us (me) more. You’re too cryptic - Victor Hugo, Beethoven… What trader shows a similar life force? NONE! None have a gift like Beethoven or anything close to it - trading is a learned skill - really good traders are rare, but there’s no gift – Soros’s cable trade had nothing to do with brilliance, it was a glitch in the system, if the market knew his position they would have run him in, just like Corzine did to LTCM in the 90’s, Tudor was a cotton trader when I was on comex, and I’ve seen his movie, there’s no Beethoven here. These men have nothing over me, Beethoven did.
    Don’t get me wrong, I love speculation, and I’m not trying to pick a fight, I’m just trying to get how you do what you do. Comparative analytics or relationship trading, like gold is tracking the S&P’s, can work for a while but eventually it fails – the psychology of the market never fails. Maybe walk us through a past trade, from begining to end. One that made money and one that did not.
    Any frustration I show here is due to my own ignorance, and I accept that, maybe you’ll help me see a little more clearly.
    Respectfully,
    Matthew

  5. Steve Leslie on September 6, 2009 4:47 pm

    I read the unabridged translation of Les Miserables when I was in my early 20s. I also read many other major works from such esteemed writers as Faulkner, Steinbeck, Joyce, Hawthorne, Eliot, Shelley and Mary Shelley, Emerson, London, Irving Chayevsky and on and on. My point is as I now blend into my middle ages, I no longer have the time to read such exhaustive literature. I wonder how the Chair does it. He is truly remarkable. That said, the things I learned back then I only appreciate most fully today. Grandparents, parents uncles and aunts big brothers and sisters, encourage the youth to embrace literature while they are young and can delve into it. Make the youth learn a second and even a third language. Constantly challenge them embrace them encourage them. Force them I implore you. You will not be disappointed. My parents always told me "education is never wasted." There used to be a phrase Reading is Fundamental.

  6. Steve Leslie on September 6, 2009 5:33 pm

    I read matthew Johnson post and offer perhaps insight. The Chair purposefully remains obscure and evasive. upon reading the Education of a Speculator you will appreciate this more. He does write in code riddles parables and such. You are exposed to such things as Lobagola effects. Hoodoos and what nots. He does this to challenge you to push you to look for meaning where on the surface such meaning does not exist. These at first are very confusing. I have been contributing to this website for 5 years and I get confused many times. His is a journey and not a destination he is like the horizon you will not reach him and he will not provide you with a magical silver bullet. This is up to you. He and other great contributors here will provide you with meals for a lifetime if you decide to sit at the table. But it is up to you. He is one of the top traders of the last half century, quirky insightful and difficult at times to understand. I am in awe of the man. His genius is intimidating and he can also be self destructive. Yet he never denies these facts. He is the genuine article. There is an intercourse in the move " A League of their Own" between Tom Hanks and Geena Davis. She wants to go back to Oregon. Tom Hanks says the he never pictured her as a quitter. Her reply as to baseball is " It's Hard" "It's meant to be hard! If it were easy then everybody would do it. The hard is what makes it great" Yoda tells young Skywalker in The Empire Strikes Back" there is no try you either do or you do not." Think on these things and read Education of a Speculator at least three times then you will start to scratch the surface of understanding.

  7. David Whitesel on September 7, 2009 8:16 am

    The market move on Monday is: Reviewed the NASDAQ BX Daily Short Volume Report for Monday, August 31st, 2009 and come to the following statistical conclusions. There were 2,927 stocks with daily short volume reported and total NASDAQ BX trading volume of 310,400,234 shares. Total Daily Short Volume was 163,626,854 shares. 52.71% of all trading on the NASDAQ BX Monday was short selling. The chart below highlights 6 stocks that had unusually high percentages of their total daily trading volume attributed to short sales.

  8. Jeff Watson on September 7, 2009 12:14 pm

    Matthew, Read Bacon's book and it will give many answers you seek. Jeff

  9. Matt Johnson on September 8, 2009 1:28 pm

    Thanks Steve and Jeff —  I'll read Bacon's book, thanks for the link!Matt

  10. Matt Johnson on September 10, 2009 8:14 pm

    Jeff, thanks again for the link, I'm reading Bacon's book now — it's excellent. I can see the relevance to trading. I'm on chapter 9, and I also ran out and purchased 'betting on horse racing for dummies'. I'm diving into the subject, L_rd help me! My first question will circle around the odds — it seems in horse racing you can find 'overlays' — I don't look for overlays in the market — or do I? So one thing I love is when a market gets overbought or oversold, I have patterns that I trade around these two conditions — would you consider that an 'overlay'? Thanks, MJ

  11. Steve Leslie on September 11, 2009 12:03 pm

    John Bollinger, a contributor to this website, has written on his Bollinger Bands. This may assist you in your work. sl.

  12. Matt Johnson on September 13, 2009 7:36 pm

    Thanks Steve, I’ve read John’s book. The information is right up there with Gann and Elliott wave. Yes, the markets sometimes have trend lines at certain angles. Yes, the markets move in waves. Yes, the markets move from trending to non-trending.
    The only difference I’ve found is that with BB’s you can add a slightly better exit module and a basic bet size algorithm and you can create an okay system, I’ve never been able to create a system (rigid) around Gann or Elliott.
    Thanks for the recommendation.
    Hey, have you read Bacon’s book, and do you bet the horses?

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