Extending yesterday’s baseball analogy, the market hit one deep into the gap on Thursday.  Before other bulls start doing cartwheels, let me remind them that a double does not score any runs with no one on base and over the past three weeks the bears have outscored us 12-3.  I certainly can run through paragraphs of analysis on the milestones the TICK data reached yesterday, but I ask that you take it on faith that the information suggests investors put money to work aggressively.  Instead, I want to focus more on the psychology of this promising bounce off the bottom in an effort to determine if stocks can extend this move.

Given the extremely elevated volatility and uncertain macro environment, the large long only institutions will Continue reading »

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For my first job out of business school, I found my way onto the proprietary trading desk of a large broker-dealer.  Despite not knowing how to effectively manage money, I somehow drew the short straw in organizing the group’s recruitment within the firm.  As a result, I met a parade of candidates that spanned a wide range of educational backgrounds and employment experience.  I tailored my interviews appropriately, but asked one specific question to everyone.  After trying to explain my job function (like I said previously, I was clueless), I would open up a new X-Trader window loaded with S&P 500 E-Minis.  I provided a tour of the platform by demonstrating the ease of executing trades for either hedging or speculative purposes.  At that moment, with blood frothing in the water, I would ask innocuously, “So, do you have any issues with the electronic futures market?”

Only one insightful soul out of the dozens queried had the right answer.  He bluntly stated, “It looks like the Continue reading »

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