My Favorite Thing

My favorite thing about analogs is that they provide a roadmap for rips and dips that would otherwise frustrate the hell out of you.  We went short near the top and have already reached our initial target.

I know some members have done quite nicely over the past few days, but it’s not the 6.8% drop that excites me (though it is fun to be making money when everyone else is running around with their hair on fire!)  It’s the prospect of reaping some of the 23 major swings averaging 298 points and 11.2% that our analog indicates are coming our way.

For those who aren’t active traders, the analog offers an equally important benefit: the ability to hedge in advance of a day like yesterday or the significant move that’s coming.  In a world where money managers are considered a raging success by beating the market by 2-300 bps, avoiding a 7% loss is huge.

Now, on to the markets.  The futures were busy overnight.

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