My market view.

palm

 

Recently, 胡同 neighbours are talking about how the rally and small volume. Here are my 2 cents.

 

Everybogy agrees that the volume tells us that there are no big players. Why it is so bullish recently? Before I answer that. Here is my question. What do small traders do? They buy and hold for a gain. Sure there are few of them will short but majority of them are long. So while the big players are out watching or already long in, small traders buy and expecting gains. The market bias is bull. However, if you poll all the people, including big players, the result would be bearish. It is not shown in the market because the major player are not trading.

 

The bull will stay for a while, at least till the OE of June. Cobra's plots said it. Average 22% in 60 days after couple 9:1 days. Historically this signal is accurate. So far, the market tells us that it is accurate this time. Fed meeting should be treated as a very short term impact. Statistically, Fed meeting doesn't prove to be a significant market moving force.

 

I can't see what will happen after OE of June even though I wear glasses.

 

 This info is for reference only not a trading recommendation!

[ 本帖最后由 palm 于 2008-4-30 11:47 编辑 ]

ppteam

right; then how do we explain market sucks in almost every summer, include last year?

Kami

Taders take summer vacation, I guess. Haha. Just like the daily pattern. When the traders take lunch break, volume on all indexes drop.

palm

原帖由 Kami 于 2008-4-30 12:48 发表 Taders take summer vacation, I guess. Haha. Just like the daily pattern. When the traders take lunch break, volume on all indexes drop.

 

This is actually one of the answers.

 

So far, for the summer slumps, there are only statistical result presented but no correlation results. This could well be another self-fufillng consequence. Would you put your money in when you know the market usually tank during summer?

 

For me, I didn't see the volume as low as recent market. So I can't conclude anything.

citimeta

agreed on the observation, but i am not sure about the theory part.

coolboy

原帖由 palm 于 2008-4-30 12:54 发表   This is actually one of the answers.   So far, for the summer slumps, there are only statistical result presented but no correlation results. This could well be another self-fufillng ...

In cobra’s post “[转贴] Sell in May and Go Away?”, the author shows that "Sell in May and go away" may not be true even from the quantitative or statistical aspect. I think this might also be psychological. Here is my two-cent explanation:

 

We all know that “Dream of the Red Chamber” by 曹雪芹 and "Romeo and Juliet" by William Shakespeare are two good stories for many people are touched and can remember after reading the stories. They are good stories because they have tragic endings. A story can have either a tragic ending or a happy ending. Unfortunately, most good stories have tragic endings because people usually remember tragic stories more impressively and much longer. This might be related to the fundamental human nature that bad things or hateful things are often remembered longer than good ones.

Now, most people plan to have their vacations in July and August. Furthermore, it needs money to have a good vacation or to have good times in a vacation. If some years, maybe only a few particular years, the market was down in June and it may either ruin people’s summer vacation plans or affect the vacation mood. As a result, the market downturn in June will be more impressively remembered by those who partially depend on the market profit to have a good vacation.