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Cycles, by Victor Niederhoffer

It's all so easy in retrospect. The market circa Jan. 31, 2006: S&P was 1300 and Google was 470. News of a slowdown in Google earnings from +1,000% or so to +990% came down the pike, and investors slammed the stock helped by a Barron's article about how stupid the customers were not to know that they were paying for some false clicks and that their cost per inquiry should be much less than the 10% of comparable cost from reaching them through print media. Then on April 17, about three months later the market sets a three-month low at 1287 amid earning's woes and interest rate jitters, falling dollar, inflation fears and loathing of Bernanke.

So on the previous day, the market had that disruptive move, going from 1299 to 1287 in an hour, shaking out all the weak longs. It hit 1299 three times in a day, setting a triple top, and put all the boys who follow the public, or the channels, or the pivots short. Then of course, the biggest one-day black swan move in the last three years.

Not to forget is the TrimTabs insight, that the payment of Service day is an illiquid one, or the writer's mojo that the Service day is one of revulsion, and that the market always goes down on the revulsive days. There it was. All that was needed was for the bearish weekly commentator to have been at his perch cheering on the bears, calling for an imminent move to the Grossian Dow 5000 level, and citing a few of his friends who caught the entire Internet move who were more bearish than ever now.




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