Sep

13

I've been thinking about the importance of deception in markets and turned to music for inspiration as well as wasps and nature. Here's a nice article on deceptive cadences. I wonder how this relates to the approach to attractors in markets, including rounds and all time highs or lows et al?


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  1. Craig Bowles on September 13, 2012 6:27 pm

    I’ve always thought that markets move similarly in various time frames. There’s even a saying that for a rule to be true, it must work in all time frames. To some extent, this is true. The business cycle runs into inflation problems late in the cycle just like intraday moves often run into problems when inflationary areas begin to outpace. When long-term upswings reverse, we often see speculative stocks having caught up and begin to outpace the general market. This is also true with intraday swings.

    Cadence seems to be a different story. Major market moves have a big move, then a smaller move, and finish with a big blowoff move. Intraday goes small, small, big. A big start to an intraday move most often turns out to be an overbought dud. I’m not talking about news related moves but just general trend changes. This difference is something we have to accept but I can’t figure out why it is so.

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