Although I will miss the cocktail reception on the floor of the NYSE today, I will be attending the annual Market Technicians Assoc seminar Thursday and Friday in NYC. Over the next dew days, I'll report on anything new in the world of charts or anything new in the movement of people within the profession.
What I am looking for more than anything is reason to believe that I am not banging my head against the wall applying "age old" and "proven" techniques to a market that is totally different than it used to be. No, not "this time it's different" but rather the principles upon which markets operated may be irreversibly altered. Forget margin requirements - the pros will figure out the next weakness to exploit. It is the fact that the mood of the masses, the actual desire by humans to buy and sell is different. High frequency trading is the satanic spawn of index arbitrage and PhDs in math. False liquidity via the Fed. Meddling by all governments. You name it - this is not a free market.
So, I will pay special attention to new techniques that were created in recent years and tested in the current environment. Volume divergences mean bupkis these days but maybe tweet counts and googly searches mean something. Or maybe the simple democrat/republican ratio. Or re-election rate for incumbents. Or rate of repatriation of profits. Or the color of Jim Rogers' bow tie.
There has to be something new that is not rooted in an old market. I'll let you know what I find.
Wednesday, May 11, 2011
Tuesday, May 10, 2011
Commodities Perspective
For those of you with some miles under your belt, you might remember a company called "Commodity Perspectives" owned by Knight-Ridder and then by Bridge Information Systems via acquisition of Knight-Ridder Financial. Ah, the good old days when the CRB index was actually owned and operated by the CRB (Commodities Research Bureau) and both the CRB and CP nicely complemented the financial information of the rest of Bridge.
But I digress. The whole Bridge world collapsed under foolish expansion (mostly buying Telerate) and we lowly employees are in diaspora.
Let's put some perspective on commodities. Yeah, we know speculators in the thin silver market got spooked by margin requirements. We also knew it was wildly out of whack. Then came the crash of the first week of May.
Crash? Really? 1929 was a crash. 1987 was a crash. 2008 was a crash. Does anyone recall 2001 being labeled as a crash? Even the days surrounding the 9/11 attacks?
So why was a 14.7% drop in crude oil a crash? I'll give you the 30% drop in silver but don't crashes usually come as a surprise? Did anyone really think a selloff was not pending?
Check out this chart of the old CRB index - the good one with a nice representation of commodites (vs. the bastardized spawn with heavy energy weightings to reflect the economy - wait a minute, that's not core! but I digress again).
Why was last week called a crash but the exact same move in March was name-less? Was everyone distracted by Japan?
Let's put this argument to bed right now - no crash in commodities. Silver maybe but not "commodities" and the implication is that the world is the same as it was before last week. Commodities as an asset class are Jim Rogers' fave and I concur.
But I digress. The whole Bridge world collapsed under foolish expansion (mostly buying Telerate) and we lowly employees are in diaspora.
Let's put some perspective on commodities. Yeah, we know speculators in the thin silver market got spooked by margin requirements. We also knew it was wildly out of whack. Then came the crash of the first week of May.
Crash? Really? 1929 was a crash. 1987 was a crash. 2008 was a crash. Does anyone recall 2001 being labeled as a crash? Even the days surrounding the 9/11 attacks?
So why was a 14.7% drop in crude oil a crash? I'll give you the 30% drop in silver but don't crashes usually come as a surprise? Did anyone really think a selloff was not pending?
Check out this chart of the old CRB index - the good one with a nice representation of commodites (vs. the bastardized spawn with heavy energy weightings to reflect the economy - wait a minute, that's not core! but I digress again).
Why was last week called a crash but the exact same move in March was name-less? Was everyone distracted by Japan?
Let's put this argument to bed right now - no crash in commodities. Silver maybe but not "commodities" and the implication is that the world is the same as it was before last week. Commodities as an asset class are Jim Rogers' fave and I concur.
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