Monday, October 6, 2008

Monday PM Notes - Autopsy

OK, I know I said I wouldn't over analyze today, but looking back for a moment, I'm not feeling quite so bad. Here are a few observations.

Let's start with the TICK chart. Note I normally have this chart scaled from -1200 to +1200 and on a 1-min chart, but expanded it here to -2000 to +2000 and 3 min to capture the full picture. First, the low bar at 10:45am was a staggering -1684. Never seen that in ten years of trading. Second, it took about 90 minutes for the TICK to come close to approaching zero from the downside. Can't ever remember the last time that happened ... that's 90 minutes of sustained selling at open without a breath.

Let's now look at the VIX, which reached a 19-year high today. My Tradestation data doesn't even go that far back, and my oldest daughter who's now in college hadn't been born yet.

As a member of the Merc, one of our roles is to provide liquidity, a role which requires us to put our own capital at risk so that others can buy and sell even during panic times ... and such infrequent days can often be painful as was the case today. Yet in the long run, we serve a useful role and are more than adequately rewarded for that occasional sharp pain.

In this business, it's truly a case of no pain, no gain, and my eyes remain steadfast on the gains ahead.

1 comment:

Anonymous said...


Now you are thinking on the right path. Erase your mind... do something defraging, purging. watch a movie, play onlioe poker, playh video games for at least 1 hour. something really fun. have *&^%...... :) ( for an hour...)

This will clear the mind...