... down a hole.

If you're up to what I think you are--it being hard to tell because you're so grossly verbose ;P--well, it should be pretty funny, das all I'm sayin' bout dat.

mkt's in correction mode, repeating pullback pattern of Jan 2010, might even be wave A of elliot wave pattern. hmmm.. i'm in for some FAZ calls just in case. watch FAZ pop next week, it's breaking out. i was in FAZ calls prior to April 16, sold on that day, and then also prior to April 27th, sold on that day, but big money-losing mistake was in re-buying 3X bear ETFs after selling those. oh well. this time no hesitation to ride out those $11 FAZ calls until FAZ hits $13ish, which is what i'm betting on.
look at AIG chart pattern set up April 26th to April 27th, dropped for a clean pop of +700% in calls. i've committed that chart pattern to the forefront of my daily conscious memories, seriously pissed off for missing that drop. oh well.

my hypothesis is that not many people will buy your bernanke shirt (by "not many people" i mean <25).

apriori or intuitive reasoning cannot in every instance replace experimentation in the real world, for the randomness in the real world may surprise our expectations, thus the need to test hypotheses.

the market's tanking, and my FAZ calls are up, sold them for a tiny gain because i thought there'd be a rebound in the afternoon, sold too early as always, oh well, can't be perfect, but the idea is to tend towards perfection as time t increases. would've made much more on VIX calls though, oh well, next time i think there's going to be massive fear and trend reversal, i'll pick up VIX calls instead, lots more action, it's been up like 20% the days that my baby FAZ was only up 6% to 8%.

i forgot to add in the 3rd paragraph above that people genuinely value and want to make sense of our increasingly complex world. they just don't know what to think anymore because there's so much empty chatter and so much information, and this uncertainty results in the lack of confidence to make decisions (this is the reason why i failed to hold my FAZ calls going into May 6th-7th: lack of confidence). i think this desire for understanding and analysis is the reason why Cramer has an audience and a following, even though the data shows that he's wrong most of the time: people want answers, want confidence, want a leader. if you can provide that in blog-form, it'll only raise the likelihood of you actually gaining and increasing sustainable traffic, as opposed to playing the SEO gamble.

Did you read The Black Swan?

yeah, cover to cover, i finally finished it last week (the library kept recalling it because others requested it) and it basically completely changed the way i think and see things now. i know i'm 3 years late reading it, but oh well, "better late than never". there's a new paperback version coming out. i follow Taleb's tweets too, some nice gems of wisdom there.

i'm now just starting Fooled by Randomness

check dis out: http://37signals.com/svn/posts/2358-this-is-not-content

apparently Obamanomics isn't working out quite so well as the Harvard economists projected (e.g. they had to extend that free $8,000 new home buyer stimulus to April 2010), so now there's news here and there on various independent sources that some nuke submarines are cruising on over to the Persian Gulf? not sure how dependable this is, i don't have a tv so i haven't caught any news from mainstream sources about this:

http://www.debka.com/article/8812/

heh, maybe if one N.Korean shoots a spitball over at the South, rules of engagement will justify some sort of crazy all out escalation of war.

next shoe to drop is consumer credit, further weakening in housing market, more and more signs that there's no real recovery after stimulus is pulled. it too many many many little optimistic events to push the markets up to that April 2010 high, but only one or a few small unpredictable severe events to drop it.

i'm getting destroyed in NFLX puts right now, that i foolishly bought too high, currently down like $2500.............i was UP $2000 last week too. still holding. something's not right, the CEO's selling shares in 10,000 blocks weekly.

the market giveth and the market taketh away.

yesterday the indexes move red on news China is shying away from EU, then today we move green on news that that news was false. hmmmm...

something ain't right my friend, something, ain't....right...

rationality is somewhat predictable, but irrationality is completely unpredictable, especially by those not watching out for it.

i've been checking out some of Martin Armstrong's articles, not sure if it was you who mentioned it, but he basically thinks we're in a 1932 situation where the market rallied after the 1929 crash, but then crashed even further below that 1929 level. he calls it a waterfall event, happened Oct 2008, then a mini-waterfall event on May 6th-7th. 2011 is his target date for all out depression to take place. i think he gets out of prison in 2011 too, not sure, i can't find much info on when his sentence is up.

here you go:
https://docs.google.com/fileview?id=0B7ifjZg7kfewYjAzNjRhNmEtM2FiYi00MGFjLWJkZDctMDA5OTlhODU3M2Fm&hl=en

On imbalance - yes, so true, here is a great explanation of the mathematic underlying your intuition...
http://market-ticker.denninger.net/archives/712-The-Price-of-Capitalism.html


Coupled with this makes an interesting realization:
http://247wallst.com/2007/03/08/why_trading_is_/

That capital cannot, over the long haul, arbitrage risk with higher interest, e.g., the capital market as a whole cannot beat "organic economic growth," capitalists that manage a lower default rate at higher interest premiums, "beating" the market, are simply "capturing the capital" of those failing at such an endeavour. Thus, charging higher interest for "higher risk" does nothing, on average to prohibit regression to the mean. Interesting stuff indeed.

So, the riskiest trading idea, and the most profitable if we desire to be the best players at the table, beating the averages by usurping capital from our fellow traders, is to make correct, highly levered and timely bets on black swan events, e.g., the collapse of deferred debt markets, i.e., where is the next debt bubble, when is it likely to implode, and how do we leverage a short...

the war on work, the anti-work mentality in the U.S.:

http://www.youtube.com/watch?v=r-udsIV4Hmc&feature=related

what made the big impact to me from that Mike Rowe talk was near the end, when he pointed out why the U.S. is in trouble: we focus so much, perhaps even entirely, on INNOVATION (the creation of new products & services), and not enough on imitation (the process of producing, reproducing products through real manufacturing).

so Apple makes the iPad, then ships off the information to China or wherever to do the imitative, repetitive work of putting it together, the consumer here in the U.S. pays $500-$700 for it at an Apple store, either from income or on credit, the Apple store salesfolk/retail-drones get paid, Apple gets profits, the consumer gets iPad but reduces in money savings or increases in debt, the foreign manufacturer gets paid, holds more dollars, increases in wealth, the workers over there get paid (though very little), and the imbalance continues.

it's not that we'd all be better off being "PROTECTIONIST", but there's something about this system that is not sustainable or self-sustaining. it will break. the rate of debt increase and growth increase is vastly outpacing the rate of growth in consumer strength, if that consumer strength tops off or declines, everything tanks with it, just like in 2008-2009.

apparently this guy thinks the S&P 500 will do a head & shoulders and then take a high dive:

http://www.kitco.com/ind/maund/may312010.html

or maybe he's just drawing a bunch of meaningless lines on a random, unpredictable pattern.

i don't know, with tensions between Israel and the pro-Palestine sides heating up, the drop may happen sooner.
i personally don't think there's enough to drive a right shoulder pop before the drop. after today's drop going into close, it looks like weakness and fear are still dominating.