Feb

11

The market's decline of 1% on Friday, from March Futures of 1456.8 which was a 6½ year high in the S&P Index, was beautiful on many different levels.

There was the beauty of covering 31 points on a one box continuation, one box reversal point, and figure basis, versus an average of 10 the previous five days, the startling move after the narrowest five non-holidays in history.

There was the beauty of two declines in a row to get the reversal boys leaning on the wrong foot. There was the beauty of one of the all-time highs in futures volume with 1.41 million contracts traded, the highest except for the January 25 volume of 1.42 million contracts in three months. There was the beauty of crashing below the key level boys stop points at 1448 where three previous one-day lows hit, the general beauty of a completely unexpected extraordinarily volatile day after such a lull with VIX moving from below 10 the previous Friday to above 11 on February 9, and the beauty of it going down on interest rate woes during the week while bond prices were actually up a half point on the week after setting a one month high on Thursday, February 8.

It brings to mind the Duet from he Mikado:

There is beauty in the bellow of the blast,
There is grandeur in the growling of the gale,
There is eloquent outpouring when the lion is a-roaring,
And the tiger is a-lashing of his tail.


Daily Speculations is very fortunate to have as its cofounder a collaboratrix who in my opinion is the world's greatest lyricist (her lyrics to a number of spec songs appear on Google). I have no doubt that she will put this, as well as the beautiful idea of the market's going down, on Fed Speak, about how vigilant they are about inflation.


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