Black Monday

Trading Resources

Twenty four years ago in 1987 the Dow suffered its worst one day decline in history losing  508 points or 22% closing at 1738.. This was the final nail in the markets coffin as it had dropped 1010 points from its August peak. The bull market that followed was extraordinary in its gains. By the…

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Why?

Trading Psychology

Apropos of this article yesterday I found this  little piece – Episodes of extreme market volatility demonstrate the role of emotion-based trading in moving stock and commodity prices.  The internet stock bubble is an obvious example of emotions overtaking investors’ “common sense.”  More recently, the extreme moves of currency (e.g. USD) and commodity (e.g. gold and…

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Normal Markets

Trading Psychology

Whilst I was away at the weekend this bounced into my inbox for comment (I don’t know the original source) SPZ s rallied 13.75% from the pre-NYSE open low on October 4 to October 12 high. Normal markets do not rally almost 14% in 6 sessions. Normal buyers do not behave this way. Volume was lacking…

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Benfords Law

History and Science, Trading Resources

In chatting about Greece and its systematic dishonesty I made reference to this post by Tim Harford. It talks about the intriguing Benfords Law which according to wikipedia is …….also called the first-digit law, states that in lists of numbers from many (but not all) real-life sources of data, the leading digit is distributed in a specific,…

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Hedge Fund Wreckage

Trading Resources

From Bloomberg Of course, the most visible big loser this year is John Paulson. For example, through September 27, Paulson Advantage Fund was down 6 percent for the month and more than 28 percent for the year, while Paulson Advantage Plus, which takes on additional leverage, is presumably down even more. Paulson International Fund was…

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