:: actio-et-reactio ::
amg's market charts and blather
Soooooo, futures ramped enthusiastically on the "Iraq news", which may result in a gap open. This is a bit troubling technically only in that the task for this week's "Triple Witching" does not change, namely, to expire the most open options worthless, still meaning at some point a sell of "a high" is in order.
Nothing new about that, a lot of volatility, churning, and no appreciable progress. By way of example, noticed today that price closed right near the Sept 3, 2002 gap down area. All the strum and drang of the past few weeks and basically no action. It may be that the end of the week is yet another net no-move close.
From a sentiment point of view, Iraq's reported "no conditions inspection" relieves only one aspect of uncertainty, uncertainty that will be quickly reinstated as the haggling over the "no conditions" conditions, and more importantly, the timeline, begins, resurrecting the wall of worry.
Options on Economic Reports Starting in October, investment houses Goldman Sachs and Deutsche Bank will manage a new market for options on U.S. economic data releases such as nonfarm payrolls, retail sales and manufacturing. The options allow hedge funds and institutions to bet specifically on the outcome of the data. At the start, only professional traders will have access to the market, but eventually, individual investors will also be allowed to trade economic derivatives.
What do you suppose are the odds of insider/leaks in this market?
So much for "patriotic buying". I thought "the rally" might carry over today, but no such luck-- pockets were cleanly picked in today's gap-down open and late day sell-off.
The President's appearance at the UN served to abate some uncertainty, allaying for just a bit longer an "out of the blue" war event. Mr. Greenspan managed to mealy-mouth his way out of saying anything of import, although in an unrelated event the Feds did haul off Dennis "I bought a $6,000 shower curtain" Kozlowski.
That leaves Friday's potentially nasty economic reports for another mini-selloff ahead of next week's "Triple Witching" options expiration, typically yet another scheduled fleecing opportunity. This means a low tomorrow or Monday is likely to be bought so as to run 'em up in time to sell 'em again at the end of the week. Got that?
Note that the approach to the lower 20bar Bolly bands is quite close. archives: http://themysterybox.com/amg
I have stood aside from trading most of this week, reluctant to test my emotional stamina in the throes of remembrance.
Being in the Northwest hasn't buffered me from what happened on the East Coast. Even so, seeing the programming today has brought home to me the terror felt by those trapped in the buildings, fleeing from the crumbling rubble, or helping others...so many that helped others. It also revived the deadly realization I knew the moment those buildings were hit that "an enemy of the US" had done that with intent and purpose and that the beginning of a very long war was only just unfolding.
Those events are shaping a generation, much like WW2 and WW1 shaped our parents and grandparents generations, and the cold war my own. I recall diving under my desk in grammar school, learning evacuation routes, and wondering who in our neighborhood had actually built bomb shelters. On the heels of the revelations of the dreadful images of the WW2 holocausts, the thought of missiles pointed at "us", locked and loaded with a shoe-pounding Kruschev at the trigger did not help to foster trust in a friendly world of the future. Luckily for me, the concept of choice, choice of living in fear or in courage, came early, thanks to my own family.
Looking at 15 minute charts for a living, it can be easy on a daily basis to set aside not just what happened, but to neglect to see with clarity the historical context in which the chain of reactions are happening. Traders like going UP or going DOWN. But in between trends, the market pauses, consolidating in anticipation of "what next". Churn and burn...commissions and patience mostly! These are periods of uncertainty and must be recognized as such so as to "live to play another day".
Political agendas, be they liberal or conservative, continue to be overtly enacted in the markets. Skeptics didn't need the Enron, WorldCom, Imclone, etc etc scandals to teach them that there are real creeps out there. But as chartists, we have the potential to see price and price alone speak. It is a life raft in a stormy sea.
The emotionally charged events of this week cannot help but have put static into the signal. The signal to noise ratio will further erode as significant political and economic news Thursday (Bush at the UN) and Friday ( a whole slew of economic releases) will no doubt serve as short term catalysts for yet more volatility. The wall of worry won't crumble at the end of this week, but we'll have climbed a bit higher, allowing a clearer perspective. Stay focussed and keep your powder dry!
From Shadow to Light - a "Macromedia Flash" presentation of images from September 11, 2001, courtesy of Time magazine
Numerical coincidences abound in the markets, most of them hotly disputed by those who believe the end result of the seemingly haphazard buying and selling is random.
Once such coincidence was in the SPX futures, which closed the day at 911. The cash index $SPX, however, closed at 909.
The futures is an actively traded derivative, whereas the cash index is, relative to the futures market, passive, ie, it reflects the moves of the components that compose it.
That the futures could be parked at 911 was curious to those who like "coincidences".
I have found my attention these past few days wandering away from the markets. The self-absorption of the media with hawking the events of 11 Sept 2001 is as ever, over the top. This over-the-topness cannot but help to spill into the market, pushing prices up, at least until tomorrow's ceremonies are over and players once again return to the work of picking pockets.
Speaking of the markets, the NDX is close to a reversal point, perhaps the daily 20d MA at 966, which is also the upper bound of the new green fork on the 15m chart. The weekly chart is looking stronger, but it reflects only 2 days of data.
This week IMO is a bit extraordinary and should not be used to gauge new-found strength in equities.
|
moon phases |
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
blather: nonsensical talk.
At times my analysis log, at times sharing what I've learned. Always my own work and views.
Content: amg
Basis: glish & bluerobot
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