Daily Speculations The Web Site of Victor Niederhoffer and Laurel Kenner

 

The Chairman
Victor Niederhoffer

Home

About Victor Niederhoffer

 
Write to us at:(address is not clickable)

5/20/2005
Orchestration, by Victor Niederhoffer

Symphonies often increase tempo and loudness and pitch range toward the end, building to a fortessimo climax with the whole orchestra playing. It strikes me that certain brokerage house reports, with their peculiar pitch, dynamics, and, shall we say, orchestration, play climactic roles in the market symphony.

Take the report released at 12:30 p.m. May 13 from the chronically bearish chief economist at a major brokerage house talking about the possible implosion of securities markets; good for an immediate 2% decline in U.S. stock markets. Now, with oil down 20%+ from its high,  we have a forecast from a certain gold-plated firm forecasting a major resurgence in energy.

I'm reminded of the time Henry Kaufman first became bullish on bonds. Just five minutes before, the brokerage house he worked for had shown me a fantastic bid for bonds, which I accepted to my seven-figure cost. Such cadences become a regular part of the market symphony.

Such cadences would make a nice CD.

A Major Quant adds:

My favorite orchestration is the Wagnerian Tristanian unresolved dissonance, endlessly deceptively leading to a false climax, as in brokerages et al making the public and short gammas endlessly lean the wrong way, then repeat. not unlike trying to strike a Taijiquan master.

For more of Victor Niederhoffer's writings, click here>>>