We didn't get 300 DJIA points.
If my abacus is working that's only 117 points. But coming as it did on the heels of Wednesday's 176 point drop in the Dow we were thrilled. Here's the post:
In Sunday's "Stock Market Choice Between Bulls Buying or Waterfall Drop" I said:Combining yesterday's 76.02 and today's 129.99 we're up 323 in four days and I'm moving on. DJIA 12,210.37.
Best guess for this week?Off by a day on the shakeout.
A fakeout shakeout Monday/Tuesday, 10-15 S&P points down and up from Friday's 1271 close.
Followed by a 3-3 1/2% upmove by the close on Friday.
So far the weekly range was an intermediate high of 1,292.50 yesterday and today's low of 1,261.90.
The right order of magnitude.
So it's on to DJIA 12,250. Currently 11,900.41 S&P 1266. More tomorrow.
[hubris, thy name is Climateer -ed]
As I said in the May 2 post "The Market as Rorschach: Trading Osama" on the expected reaction to bin Laden's death:
Combining our proprietary "What's on TV" timing model (backtested to January) with some fancy pattern recognition software gives us a trade set-up.That one worked out on direction but the decline was only half the expected magnitude.
A burst of enthusiasm causes sellers to pull their offers.
Seeing planned trades moving away from them buyers increase their bids.
Markets gap up at the open and continue higher until somewhere between 2 and 4 p.m. EDT.
It dawns, first on the computers, then on the wetware that this is a silly reason to be jumping to pick off offers.
This daily high is also the high for the week with the market losing some of its daily gains into todays close.
The selling continues Tuesday and Wednesday resulting in a three to four percent decline, top to bottom.
I've violated the sacred laws of analysis.
1) I've made a public prognostication where I have nothing to gain by being right and egg on the face by being wrong.
2) I failed to couch my bet in terms vague enough that it can be spun with ex post facto revisionism.
3) Most importantly, the prime rule: If you give a price target, never, ever give a date. Much less a time.
With 20 minutes to the open S&P futures are up 7.30, DJIA futures up 72.
It's probably time to go tweak the equipment.