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As others have noted, timeframe becomes a serious question in regards to this testing. I've been given the impression that academic testing in the area of high frequency data (which is frankly the realm in which most folks here probably operate) draws a somewhat different conclusion. You're...

This may be picky, but to make sure we use the terms and figures correctly since they have been used incorrectly a couple of times in this thread already: One basis point is equal to 1/100th of a percentage point or .01%. A .25 basis point cut would mean .0025%. That would move Fed Funds...

Bush is by no means the only one. The first couple of years Clinton was in office he would make statements and the market would tank. At some point someone must have told him it would be best he keep his mouth shut about the economy, etc. And Treasury Secretary Bensen was at least as bad.

You might be right about the bottom not being in, though that could depend on in what way you mean that. Prices? Sales? Construction? As for the ARMs, the resets are happening, but are the rates that much higher. The advantage of what's been going on the last few months is that interest rates...

That's happening now. They can now go out an pick up property at lower prices. The mortgage terms may not be as favorable, but that's a good thing.

It might not be a total fix, but it's enough of one to help turn the psychology of the system, and that's really want needs fixing.

Agreed.

I've taken a specific look at volatility in a different fashion - using a normalized version of the Average True Range indicator. ATR simply is a 14 period average of daily ranges (accounting for any gaps as well). Normalizing just expresses it as a percentage of current price (or an average)...

How would you define this average noise range?

While I haven't done doctoral level work, I do have a strong academic background in finance. The EMT was something I rejected very early on (undergraduate to be exact) because the assumptions do not hold up. One of them has to do with efficient distribution of information. People neither...

Tell that to the folks who had "portfolio insurance" during the '87 crash. As the market declined they had to sell more index futures, which pushed the market lower, which caused more selling, and so on, and so on......

Actually, to get technical, what you are referring to in the farmer case (which is hedging, by the way) is forwards, not futures. Futures are just standardized, exchange traded forwards. Forwards still get traded in the OTC market, especially fixed income instruments and currencies. Either way...

Futures (and options) were created as a hedging vehicle. Speculation is just an ancillary use.

If you read most job postings where a CFA is mentioned as a requirement or a desired designation you will find that they generally say CFA or MBA.

Personally, my risk size depends a lot on the timeframe of the trade I'm doing. I'll take more risk on a longer-term position trade because they are less frequent - meaning fewer potential losing trades over a given time span. For a short-term trading strategy where the ins and outs are...

The stock market doesn't really seem to be caring too much about what's going on in the credit market, which to me makes sense. Stock investors think in terms of the price of their shares going down. The folks in the money market are worried about default - not getting their money back at all...

It means that the stock is more volatile than the overall market. For example, if a stock had a beta of 2, it would tend to move twice as much as the index. So, if the S&P 500 rose 5%, the stock with a beta of 2 would be expected to rise 10%. That goes for the downside as well.

Exactly! It doesn't do jack. It's fear which has everyone piling in to Bills. A rate cut isn't going to solve that. There's only two things that will fix the credit crunch. Either the market needs to lose the fear or rates need to move up enough that they feel like the return warrants the risk.

Yeah, I caught that. The market, though, focused on what appeared to be a shift toward worry about the economy vs. worry about inflation. Not that either really means anything. I'm still waiting for someone to explain to me how lower rates by the Fed (meaning the Funds target rate) will...

As soon as Cramer said all his contacts were getting caught short I said to the guys around me I'm fading Cramer. It takes real buying to create sustained upside, not just a bunch of shorts having to cover.