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The Chairman
Victor Niederhoffer


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Briefly Speaking

Making the Rounds. There were some notable moves in markets on Monday. The S&P futures moved to 1299.75 at 3:30 PM EST before falling to 1294 at the end of the day -- the highest close since the 31-day high of 1299.70 on Jan. 11.

The cash index closed at 1294.12, just missing the five-year high of 1294.18 set Jan. 11. The index has not closed above the round number since May 22, 2001.

In summary:

event                             date          futures          index
close                             27-Feb-06      1294.0         1294.12
prev closing high                 11-Jan-06      1299.7         1294.18 
most recent close above 1300      22-May-01      1312.8         1309.38 

What does it mean? Well, I hyothesize that the second time a round number is breached, it is more bullish than the first time if the first time led to a failure. Also, with the Minister's permission, I report the tested result that a close within a certain distance of a round is quite bullish.

A Bad Day for Commodities. There was yet another 3% decline in the GS Commodity futures index, from 423.8 to 411.50. But it was not what one has called a healthy day, in that stocks were up, so just the commodity longs suffered a disaster. I am reminded of the first time that I met a certain personage at the good offices of her then employer where they made the mistake of putting me on a televised panel with a representative of a white-shoe brokerage firm who was hawking the idea that commodities perform just a well as stocks over the long term, if you take account of maneuvering near the rollover dates. I could not help blurting out that the last time they came up with that argument, shortly thereafter Metallgesellschaft went bankrupt and apparently they hadn't learned their lesson, nor had they read the work of Julian Simon, nor should my relative silence be taken as acceptance.

It was at that time that I realized that I was not fit to be on any panel, ever again, and that I was a superfluous man, especially since I had the results that I reported in my highly favorable review of the Adventurer's work showing that a buck invested in a reasonable prospective basket of commodities in 1900 would have grown to some 1/10th to 1/100th of an investment in stocks at that time.

Someone's going to remind me here that since the time of such review commodities are up 50% or some such, and that I am always bullish on stocks, and that had something to do with my 1997 debacle. I hear the sounds of Annatevka from "Fiddler in the Roof" in the background as I write this and that is my answer.

A little bit of this, a little bit of that.
A pot, a pan, a broom, a hat.

Someone should have set a match to this place years ago.
A bench, a tree.
So, what's a stove? Or a house?
People who pass through Anatevka don't even know they've been here.
A stick of wood. A piece of cloth.

What do we leave? Nothing much.
Only Anatevka.

Anatevka, Anatevka.
Underfed, overworked Anatevka.
Where else could Sabbath be so sweet?
Anatevka, Anatevka.
Intimate, obstinate Anatevka,
Where I know everyone I meet.

Soon I'll be a stranger in a strange new place,
Searching for an old familiar face
From Anatevka.

I belong in Anatevka,
Tumble-down, work-a-day Anatevka.
Dear little village, little town of mine

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