Predictions

You know that I do not make predictions. Simply because I believe that my hit rate is not good enough. There are just too many variables at play in any human endeavor and getting their interactions just right in order to make the correct prediction is something that I am not good at doing. Despite this I predict that the markets will be volatile in the US today. On what do I base this? Just look at the amount of data crawling out of the woodwork today!

For those who do not have access to a berg, there are several data releases today. I will just name a few 1] Initial Jobless Claims 2] Continuing jobless claims 3] Leading Indicators 4] Existing home sales 5] Existing home sales MoM etc.... There are actually several more. These numbers specially the continuing jobless claims and the home sales numbers can swing the market in either direction depending on the expectations.                                          

That the US is obsessed with numbers is not debatable. I mean just look at the amount of statistics that they can create in simple games like basketball, baseball or American Football. This obsession with numbers is also seen in the financial markets. There in lies the problem. The more numbers one has, the more one believes in this myth that analyzing numbers will help us understand the direction of the market. An inordinate amount of time and effort is therefore spent in trying to predict the future instead of reacting to what the market is doing at present.

I cannot complain though. It requires all kinds of investors for the market to exist and my methodology would not have worked but for the fact that there are several people out there with numerous methodologies and beliefs to trade and invest in the market. For that I am eternally thankful.

Coming back to my position, I am short and I intend to remain short until 5210 is taken out. I also bought a lot of 5200 calls yesterday. I will get out of them today if 5000 is broken.