May

10

I, RobotI normally don't comment on market moves as it's hubristic and self referential and exacerbating to those who lost and generally self defeating if too useful, but many people have asked me why it happened and here are my brief thoughts without the counting and fact checking that I would do if I didn't have seven kids and seven mortgages.

1. It was a exact repeat of what happened in October '08 where the market plunged from 1200 to 1000 on the news of the bailout approval and acceptance. It had Lobagola-ed back from 700 to 1200 without a pause and now was ready to go back and forth the way it did before 1200.

2. The inside trading of the French Bank was in play again as it broke through 1200 that day they exited ahead of everyone else and the book the perp wrote said the management knew about it.

3. The rational expectations had to make it happen. The service rate is going up by 100% in Jan 1 so why would anyone sell in 2011 when they can sell in 2010. Knowing that they will do it on Dec 31, they keep moving back to the current.

4. The fixed boys are always prey to the judgmentals. They have to do what the robots say and they do it without regard to price as they have found that the robots do better than the judgment on getting an execution.

5. All the robots said it was going to go down. The moving averages were broken. The round numbers were broken. The Dow 10000 was broken. The price at the beginning of the year was broken. Each break triggered "smart" robots to sell.

6. There was revulsion from the sagacious remark on Monday that the oracle himself had the other side of trades with "the bank". It was good for a 2% rise, but people are not such fools. And there was revulsion that they were playing a game where they are treated as such useful idiots. After being fooled like that by the wind from the granaries the whirlwind of a whip-last occurred.

7. There is an all-seeing eye that makes the prices of stock go opposite from the currencies. When the dollar rose by 5% against the euro, that was too much profit for the dollar investors so the stock market had to go down that much to equate.

8. There had been no decline of 1% for a month and this regardless of the astronomical Dr's study is highly bearish. Everyone was making money by going against the little jiggles until the robots found themselves with a loss that they were not accustomed to.

9. The broken window and all that. There is no way that all the transfers are not going to have a negative multiplier and this is reflected in incentives to invest which reaches a climactic point on the days before the flexionic releases on the first Friday of the month.

10. The number itself was going to show a non-random uptick when the denominator and numerator had the same random seasonal adjustment and this was released as usual during the lunch on a strictly need to know, only to a handful truly necessary operatives.

Many more but that's a start.


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