Apr

2

One has to hand it to the market mistress in that Friday was totally disruptive, going below the low of the week at 1418.5 and above the high of the week at 1440 and ending just unchanged.

One could write a book about that one day in the life of the market. The last chapter would be, "It Ended Unchanged." There are so many reasons that the mistress loves it when the market is unchanged, but most of them have to do with homeostasis. When the market moves too much from close to close it causes disruption. Institutions must be adjusted; some floor traders and their ilk, who reverse every excess, might actually lose for a day. Moreover, the ideas that have the world in their grip, i.e., agrarian reform, and return to nature, envy, and egalitarianism, might suffer a temporary upheaval.


Of course all this must be quantified with respect to Friday, March 30, 2007, moves of this nature, and what that portends for the future. The market mistress can't do the same thing too often or else the public might not do the wrong thing as much as is necessary to absorb the expenses of the massive infrastructure.

Ken Smith writes: 

Ordinarily I am not a news watcher. I ignore headlines. But this past week I did notice the Bloomberg page, the subheads where the sez and talking heads reveal their market engineering.

Every day during the period Vic mentions the news there were different warnings and different sez's. One day there were positive scams and the next day negative scams. One only needs to understand every sez is a scam and the mystery of why in one day the world is upside down is solved.

Victor Niederhoffer adds: 

Indeed, one notes that a Friday high and Friday low, both at extremes for the week, has happened only seven times since 1999. The last happened on April 7, 2006, with the last five occurrences being relatively non-predicitive but with very high standard deviations of future change relative to the norm. 

Robert Ray adds:

There are moments when one feels free from one's own identification with human limitations and inadequacies. At such moments one imagines that one stands on some spot of a small planet, gazing in amazement at the cold yet profoundly moving beauty of the eternal, the unfathomable; life and death flow into one, and there is neither evolution nor destiny; only Being. — Albert Einstein 

Victor Niederhoffer replies:

A beautiful quote. Einstein felt the same way about the mysteries of blindfolded checker and chess play. Brings to mind Pillsbury's playing 20 games of checkers and 20 of chess simultaneously, with his back to the boards, while engaging in a game of ping pong and carrying on repartee with the spectators. 


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