Or through a glass darkly…when we first heard that Knight Capital had blown $400MM we got it confused with the massacre at the midnight showing of Dark Knight where the massacre occurred. It was natural for us to think that way, since an ongoing massacre is what has been happening in the hedge fund and trading world.
We had expected a bullish week, but the cabal of dark bears seized on two days of power bars and beat the market senseless. Usually when there is nothing to say we don’t say anything. There is nothing to say now, (except to complain) but there may be one or two technical observations. In spite of the roller coaster like markets lately the wave pattern since June 4 is intact. Higher highs and higher lows. Second, four days down will very often exhaust the downwave. It strikes us as optimistic that in spite of the repeated efforts to break the market in a very negative economic environment this little wave remains intact.
Readers who observed our Basing Point stops should have watched all this nonsense with detached equilibrium.