Saturday, March 06, 2010

Saturday Rock Blog: Fantasy

IWM six month daily, blast off on no volume:

6 comments:

Chicagostock said...

Capitulation high: Russell 2000 666 March 10

Capitulation low: SP500 666 March 09

pythagoruz said...

Wow, I didn't even notice that. $RUT closed at the high Friday which was 666.02, dead on the devil's number. What a strange and miraculous coincidence that would be for it to happen exactly one year from the S&P 666 low that we all know so well. What could it mean??

I think the market will crash soon, but we need to see a very high volume up day or reversal day first. Remember, the S&P, Q's, dow, have not yet made a new 52 week high in this cycle. Its too close for the bears to not get squeezed.

chintan shah said...

Hey Hunter,

What happened with S&p b/w 1995 to 2009 had happened b/w 1962 to 1976.
(almost same chart pattern,One can even successfully fit a curve)

there was little bit correction and then markets were in sideways for years till 1982.
So there is good probability that these things may occur again.


Cheers,
Chintan

pythagoruz said...

Hey Chintan,
Yeah, a lot of people are saying that the market could go no where for a while and the VIX is signaling low volatility. However, the market always seems to find a way to make big moves even if they go nowhere on long term time scales. Since we've just had one of the biggest and strongest rallies in history over the last year I wouldn't be surprised to see an equally impressive decline given the state of our economy. How low it goes, we'll have to wait and see.

chintan shah said...

Hey Hunter,

Markets didnt rally actually,they just recovered from deep bottom.Right now Fundamentals are extremely poor like employment data etc..and dollar has also devalued against strong economies like cad,aud etc.. due to fiscal deficit.So to compensate this inflationary effect stocks rose .But this rise would be worthless as stocks rose 10% and $ also devalued some % against strong currencies.So overall this rise in stock makes little sense.

As far as future is concerned,if $ still devalues then markets have to inevitably rise.and if $ becomes strong against them then markets will decline.But it seems like either $ is going to be in sideways for long period against cad/aud/chf or it may further devalue against them.

So far it looks like usd/cad,usd/chf,usd/aud may create fresh lows.
they markets have to rise as said before.

if $ becomes strong then markets will heavily decline but in that scenario flight to quality will be T-securities and yields have to drop.But right now yields on Gov Bonds are rising so most likely thats not going to happen.

If you correctly predict how usd or bonds will behave then it would be pretty easy to forecast stocks.


Regards,
Chintan

chintan shah said...

These things sounds dramatic but its reality.

two biggest hot shots in HF industry are ken griffin (citadel) & jim simmons(rentec)

ken's age is ~41 and simmons 70+ retired last yr.

They both have almost same style of crookish origins,



simmons started with managed futures in 1986,the fund made loss for two consecutive years.
Then somehow his friend and mathematician elwyn berlekamp bought that fund and re-wrote the code and made it profitable for a year.then i dont know why but he sold this fund back to simmons and simmons took this things to NY.


Same with griffin where he told rush simonson that he wants to start with convertible arb.simonson wrote code ,raised funds.introduced griffin to FoF manager.then somehow that fund which they were managing got closed and griffin moved to Chicago.


Most recently such a kind of activity took place in zuckerberg's case.


These idiots cheated their mentors and made fortune.Poor chaps.