Kudos to MMs
- Thread starter nitro
- Start date
Hmmmm, well this is clearly wrong as it is playing out differently. Appears the market bought into this news. Still, imo it is grossly underestimating the effects of the stabilization that it will bring to the Euro, and I believe the theory will bear out over the summer into the fall.
There was a big disconnect yesterday with the DOW, which caused my head to lean to one side in wonder. On the other hand, risk was clearly being put on, as the small caps were leading the market higher. This is rarely a one day event, and I expect at least one or two more strong legs higher. It all remains to be seen where it lands.
FED will be another non-event, with language changing a little bit. I have no idea what they will say, but it is becoming (always has been imo) clear that the problems in the US are structural. Easy money helps, but in a global economy, that easy money is not necessarily spent here. The whole notion of work is changing, but money is a finite resource. In any event, I have zero fear of how the FED may affect my long positions. If anything, markets will rise into the FED announcement, and rightly so. FWIW, dates and previous statements:
http://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
Therefore, nothing to do. Holding balls long here. Deltas have picked up quite a bit, and it is now like holding 3 units long ES contracts.
A paradox?
Are volatile markets more or less efficient then trending markets? If we look closely at volatility, dispersion around a mean-value expands, whereas trending markets generally have tight ranges.
Therefore, one would think that volatile markets are in fact less efficient than trending markets. How come all the popularity of trends then? Yet, we all speak of needing inefficient markets to make money, and that if markets are in fact efficient, we are banging our heads against a wall trying to extract outsized profits from them. So do we want non-trending markets? Then how come "traders" speak so often of "the trend is your friend" ? Something needs a deeper analysis because we have our goals and language all mixed up. No wonder so many retail "traders" lose.
This seems contradictory somehow. Perhaps the language is what is confusing. First, as traders, we want volatile markets. Perhaps as "investors" we want non-volatile markets. So, is the goal of the trader then to not lose money in trending markets, and sit tight and wait for volatile markets? Is the role of the investor the opposite? If you want to maximize both, how do you structure positions? What is the mathematics and theory of all of this?
Just some random thoughts.
Are volatile markets more or less efficient then trending markets? If we look closely at volatility, dispersion around a mean-value expands, whereas trending markets generally have tight ranges.
Therefore, one would think that volatile markets are in fact less efficient than trending markets. How come all the popularity of trends then? Yet, we all speak of needing inefficient markets to make money, and that if markets are in fact efficient, we are banging our heads against a wall trying to extract outsized profits from them. So do we want non-trending markets? Then how come "traders" speak so often of "the trend is your friend" ? Something needs a deeper analysis because we have our goals and language all mixed up. No wonder so many retail "traders" lose.
This seems contradictory somehow. Perhaps the language is what is confusing. First, as traders, we want volatile markets. Perhaps as "investors" we want non-volatile markets. So, is the goal of the trader then to not lose money in trending markets, and sit tight and wait for volatile markets? Is the role of the investor the opposite? If you want to maximize both, how do you structure positions? What is the mathematics and theory of all of this?
Just some random thoughts.
The predictions were fine, it's just the damn "parameter" is inverted.
