Kudos to MMs

When I first stumbled on this thread, I thought "Kudos" was a Japanese brand of condom!

Actually, it is a very interesting thread, with a fresh view. Definately one of the better ones on ET.

Cheers!

 

"FV" ~825. Nasdaq futures have been doing the leading, and they appear to again this morning. Imo, it is odds against to sell strong NQ, so pullbacks should be seen as buying opportunities, if you can stomach buying with "FV" below your long price. I don't do it, but aggressive traders would.

QO and QI (gold futures and silver futures) made their debuts recently at the CME. Recommend you put those up on your screens. Odds high that oil futures close above $50 again today.

Otherwise, imo this is more sideways action, with possibly big range.

 

Forgive the perhaps basic question...but how are you calculating fair value for the SP?

Thanks.

 

I use a homegrown method that is proprietary.

 

There is a 5-year tip auction today that is worth keeping track of.

 

Terrible and ridiculous. You are on ignore.

 

"FV" ~ 820. Other than the F news, I see little or no reason to get excited. Alternatively, other than unemployment figures that are almost two weeks away, I see no reason to be fearful either.

More of the same range bound trading imo.

Oil futures above $50. Probably hover around this area a while too. No real edge to either side, imo.

I was a bit surprised by the MSFT stock response to earnings. Perhaps it is more a play on Windows 7 than anything else. But Windows sales are driven mostly by new cycles in hardware upgrades. I just don't see it. Another possibility on the cause of the response is that MSFT is making it much harder to pirate copies of windows. That would increase their revenues mostly overseas, or, these people will just use linux since they don't steal it because they can, they steal it because they can't afford it.

 

You know, since the market seems to be almost always out of sync with your FV calculation, how can we know that it is your FV that is incorrect and not the market???

After all, the market is always right. Then your FV must be wrong...

 

I have already answered this. See below. The market does allow for arbitrage, and hence it is "wrong" often. But not on the time scales that we saw. If you believe that "FV" has predictive properties, energies must have been going somewhere. The question is, was the energy reversible, or was it friction that was unrecoverable? If it was not friction, then there was money to be made disproportionally to risk taken.