1. My 18 year old Lab regularly wakes up and barks at 5 am, and the coyotes are waiting right outside the door and howl in unison. One wonders if they are waiting for a meal or believing a friend is close. The market often is near death at 5 am and lurches in a spiral, with the Dax plummeting below the round.

2. The last hour on Friday often reminds me of the last two minutes of many basketball playoff games, especially those of the Celtics. The lead changes five times. There are violent moves with three-point shots and running of stops on both sides, and a complete recap of what has happened up to that time. Slow but steady wins the race.

3. The Dollar/Yen and the S&P do a very nice dance together and when you trade one you are really making a forecast of the other. Many times all the people who use the program I invented are waiting for a move to happen predicted by this or that market on this or that day or time, and out of the clear blue sky, someone like Dr. Greenspan will be speaking at a lunch, and will say something that makes the prediction come true. How did it know? And how if it didn't could you keep up with those who don't pay commissions and are always ahead of you on the bid or offer no matter how fast you are?

4. The many and increasing 100 million trading days that the "banks" are realizing these days presumably will help their kids get into certain Ivy League schools or at least get them a good letter of recommendation from former "bigs" there.

5. After a 35% rise, when the market drops 5%, the bearish commentators and the newspapers are not as hopeful of the big decline as they are after declines that follow terrible moves.

6. The Laffer Curve should be generalized to encompass the incentives that people have to buy and pay whenever any purveyor tries to siphon away their margin of benefit.

7. I can never read a Patrick O'Brian book without finding in every chapter insights into how by following the wisdom of Jack or Stephen, I could trade better.

8. I wrote a letter to a little boy telling him that having a strong and long base of operations is a key to success in life and I would be pleased to share it with those who might find it of interest in life or markets.

Alston Mabry writes:

My dogs and I have made a casual but first-hand study of coyote behavior (less casual, perhaps, for my dogs, especially Trevor who lost a dollar-sized chunk of fur and flesh to a coyote bite when he was about three). We call it a "hoot-up" when they howl as a group. In my experience, a hoot-up is a claim on territory. Coyotes coming back into the mountain park here just before dawn, after having spent the night scavenging and hunting cats and ducks in the suburbs, will stop at a familiar waypoint and do a hoot-up: "We're back. This is our territory." Several times, too, when I have been out with the dogs at 3am, and they have found and noisily chased a rabbit through the cactus, the coyotes came along twenty minutes later and did a hoot-up on the spot where we barked and whined, to claim it and try to scare us off. When you have a group of coyotes like that, they are a family, not a pack, with the parents and usually one or two cohorts of siblings not yet struck out on their own.

The end-of-day action reminds me sometimes of a football game, when there are six or eight minutes left in the 4th quarter, and the team that is behind starts throwing long passes and marching down the field. And I wonder, "Why didn't they play like this all game?" But similar to markets, they didn't play like that all game because of risk. When they get to the point where the game is on the line, then everything must be risked or else all is lost.

It's also interesting to throw the Nikkei-S&P correlation into the analysis. Is it time to go long the AUD again?

Is it that we watch the market turn and then interpret contemporaneous news as the cause? And when nothing much is happening, we ignore the news– if the market isn't reacting, then it can't be important. It's good that with both news and market data, there is an uninterrupted supply.

Paolo Pezzutti writes:

Two good friends interact and follow the same path in life. Some time one is leading, some time some the other takes the initiative. Overall they share the same values and enjoy spending time together. Suddenly, for some reason difficult to explain they part and go to different directions and not without pain. Similarly markets correlations emerge and increase to a point where you think there must be really very good reasons for them to work. Then you find out that it was all ephemeral and they were may be brought together inexplicably and randomly. With sadness you look at your friend and do not understand any more, it is simply a different person. And you hope things could go back to the good old days. Sometimes they do, but most of the times they don't.





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