Daily Speculations
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Daily Speculations |
23-May-2006
A Good Take-Off Spot, from James Sogi
Yesterday's big waves in the markets reminded me of big wave surfing. The big 15-point moves are like 15-foot waves. Either you are in the right spot and catch the ride of your life or you eat it big time. My favorite big wave spot Mahaiula is very tricky to ride big waves. The 15-25 foot waves come marching in from outside the reef and the big ones tend to break early on the outside cloud break reef, and the white water washes through and sweeps most of the surfers waiting into the beach under water. After surfing there for 25 years with my best friend, whose family used to own the property when we surfed for days with the place all to ourselves, I noticed that there is a small area about 15 feet long and 6 feet wide in a triangle shape in the middle of the ocean that is not marked. This spot is only found by triangulating certain palm trees against a certain lava dome, and certain shaped rocks, which formula is of a highly proprietary nature, but which allows me to sit in the midst of giant breakers crashing around, and be untouched, and when ready, to paddle a few strokes and be in position to ride a giant wave, sometimes without getting my hair wet. It takes courage to sit in place and not turn and run, as a huge 20-foot wall of white water comes rushing towards you at high speed sounding like a freight train rushing at high speed, but amazingly just at the last minute, the white water backs off, and reforms into a perfect shaped wave.
Yesterday's market had some big moves up and equally big and rapid moves right back down, and then right back up, at least looking at a typical bar chart would make it seem that way, but perhaps may mislead as to what is going on, and obscure where to sit or enter. Look at just the hourly time and sales below. Look at just the closes. It would seem nothing much happened all day with four-point range in closes. The highs are relatively clustered as are the lows. Looking back on the day always seems so easy, but looking forward at levels is something I've heard long time traders talk about. Mr. E says, look at such and such a level. Chair talks about rounds. But there are many levels. Chaos and stampedes go in either direction, but what is good to have is a safe spot, or safe level to sit and wait for the thundering freight trains to go by safety and a spot to get on and off without getting worked over and dragged underwater. As Tom thoughtfully suggests, it's good to have these levels worked out in advance with your methodology because stampedes are distracting. Yesterday's violent back and forth had method to the madness. Simple addition and subtraction provide more accuracy than estimates based on colored lines moving around.
Low High Close 05/22/06 10:00 1262.50 1268.75 1265.00 05/22/06 09:00 1262.75 1265.75 1264.75 05/22/06 08:00 1262.50 1265.50 1265.25 05/22/06 07:00 1264.25 1265.75 1265.25 05/22/06 06:00 1262.75 1266.00 1265.50 05/22/06 05:00 1259.25 1264.25 1263.50 05/22/06 04:00 1262.25 1267.75 1263.75 05/22/06 03:00 1267.50 1271.00 1267.75