Jun
25
Knots, by James Sogi
June 25, 2010 |
A few years back, Dr. Niederhoffer studied knots and how the science of knots might apply to the market.
Here is a link http://allaboutknots.blogspot.com/2006/01/selecting-strong-hitch-for.html discussing knots for new types of rope called spectra that are stronger than steel per weight, but slippery on the surface. A small line can hold tons.
This brings to mind the current market slippage over the last week, stair stepping down, and the gap underneath. What kind of knot formation will "hold" the market. The article discusses the criteria for a good knot: secure, stable, and strong. The double bend with a double wrap around the post or carabiner is considered an attribute that lessens the angle, thus increases strength,, stability and security. Together with a double bend, will finish.
When committing capital, one wants these attributes in the market so it will hold. The last bottom a few weeks back had the massive double bend, all in the space of a few hours. Quite wild. A sharp reversal in rope tends to lack strength. Same in the market. I think some sort of double bend and a double wrap after or lower angles is an idea worth testing.
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