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Dr. Duru  

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  • A Hypothesis For The Connection Between The Australian Dollar And The S&P 500 [View article]
    Right. It's that *relative* comparison that is easy to forget. For some time though, I was expecting a pretty nasty pullback in the Chinese economy. I assumed that would impact Australia far more than the U.S. or Europe. But my expectation for such a pullback has waned significantly over the many months, and I closed that out after the RBA essentially seemed to say China achieved its "soft landing"
    Aug 20, 2012. 07:26 PM | Likes Like |Link to Comment
  • A Hypothesis For The Connection Between The Australian Dollar And The S&P 500 [View article]
    Thanks. I typically just look at the charts. Sometimes I compute the correlations for extra confirmation and/or a finer tuned conclusion.
    Aug 20, 2012. 07:24 PM | Likes Like |Link to Comment
  • A Bearish Divergence As Australian Dollar Stalls While S&P 500 Jumps [View article]
    Ah, yes. The dreaded hypothesis! :)
    I have indeed focused on observation over hypothesizing because it was so hard for me to believe for a while that the carry trade alone was enough to overcome the economic headwinds facing Australia. Now, I am more of a believer. Regardless, no matter what hypothesis we come up with, it will be hard to bring data to bear to toss out the null hypothesis.
    So at great risk, I am guessing the following:
    1. Light summer volume makes these markets more amenable to the whims of a few - those few are doing carry trades that benefit BOTH the Australian dollar and the S&P 500.
    2. Given the Australian dollar is a smaller market than the S&P 500 (or the U.S. stock market in general), the Aussie is the "canary in the coal mine" because the departure of the carry traders will be felt in the smaller market first.

    The bearish divergence is in its beginning stages. As I mentioned, it took many weeks before the S&P 500 finally followed the Australian dollar downward. I will be maintaining vigil along with many others I am sure. Stay tuned for future pieces on this topic and some more quantification of the relationship and its impact.

    Fundamentally, I really do not think there has to be a connection between these two markets, but I am greatly fascinated by the observation that there seems to be one. As long as this signal continues producing valuable insights, I will stick with it.

    Thanks for asking that question.
    Aug 19, 2012. 07:25 PM | Likes Like |Link to Comment
  • A Bearish Divergence As Australian Dollar Stalls While S&P 500 Jumps [View article]
    I have looked at gold and copper before. Copper tends to generate many false and/or very early signals. The one that always sticks in my mind was the decline in copper prices in 2006 (2007?) that seemed to indicate the S&P 500 would finally give way to the crumbling housing market. Prices turned up sharply from there on a ramp in Chinese demand. I have only looked at gold and the S&P 500 to show how little the index has recovered from the 2009 lows when priced in gold. I need to update that chart soon now that I think about it given gold's one-year stasis.
    Overall, I think it will be harder and harder to correlate commodities to the S&P 500 given China's influence on those prices.
    The bond market is highly manipulated by Fed monetary policy, so I find it difficult to tease out meaning from govt bonds.
    Aug 19, 2012. 07:19 PM | Likes Like |Link to Comment
  • A Guide For Day-To-Day Trading In Apple's Stock [View article]
    I think a few other writers have also noted the likely connection with Apple's stock price/volume and options trading. However, I have yet to see specific numbers put the hypothesis to the test. The problem is that historical options trading data is limited out there and likely costs a good amount of money! I will give it a try though one day soon.
    Aug 19, 2012. 11:54 AM | Likes Like |Link to Comment
  • A Guide For Day-To-Day Trading In Apple's Stock [View article]
    Yeah, mapping an iron condor to daily tendencies is complicated. I think these data are most useful for determining when to initiate a position (mainly bullish). Good luck!
    Aug 19, 2012. 11:52 AM | 1 Like Like |Link to Comment
  • A Guide For Day-To-Day Trading In Apple's Stock [View article]
    Cool. I think these patterns can be useful for any kind of trading whose success depends on timing. Note well of course that these are averages. I hope to dive a little more into the specific distribution of returns, max gains and drawdowns, etc... at some point.
    Aug 19, 2012. 02:24 AM | Likes Like |Link to Comment
  • A Bearish Divergence As Australian Dollar Stalls While S&P 500 Jumps [View article]
    My pleasure.
    Aug 18, 2012. 12:13 PM | Likes Like |Link to Comment
  • A Bearish Divergence As Australian Dollar Stalls While S&P 500 Jumps [View article]
    Glad you found it useful.
    Aug 18, 2012. 12:13 PM | Likes Like |Link to Comment
  • A Bearish Divergence As Australian Dollar Stalls While S&P 500 Jumps [View article]
    Good! As you can tell, I think the on-going relationship between the Aussie and the S&P 500 is well worth the time spent watching...
    Aug 17, 2012. 02:42 PM | Likes Like |Link to Comment
  • S&P 500 Performance By Day Of Week And The Changing Nature Of Trading Tuesdays [View article]
    Sorry for the VERY late response and thanks for the kudos!

    If you give me a list of stocks, I can eventually dial up a few of these charts for those stocks. I am about to write up an article using this same analysis for Apple's stock. I am amazed at the distinct differences in behavior based on the day of the week!
    Aug 17, 2012. 05:56 AM | Likes Like |Link to Comment
  • Stronger Take Home Pay And A Productivity Puzzle Tug On The U.K.'S Economy [View article]
    Fascinating theory! I like it. I will keep that in mind as the BoE twists and turns trying to figure this out. You might want to send them a helpful note. ;)
    Aug 15, 2012. 11:45 AM | Likes Like |Link to Comment
  • Stronger Take Home Pay And A Productivity Puzzle Tug On The U.K.'S Economy [View article]
    Yes, all good points. My reference to relative economic success was focused mostly on the direction of GDP growth and consumer income growth and spending. Posen did a pretty decent job attempting some comparisons. I wrote about it here: http://seekingalpha.co...
    Aug 15, 2012. 09:24 AM | Likes Like |Link to Comment
  • Priceline Not Likely To Recover Post-Earnings Losses In The Near Term [View article]
    Yes, I am taking this story one quarter at a time. I will revisit prospects with the next earnings call and so on.

    One thing that intrigues me about PCLN's story is that Europe has struggled with macro-economic issues for over 2 years now. PCLN did well to withstand those headwinds. I was a bit surprised that "this time is different." But given that it is, I do not feel comfortable making longer-term bets on when these issues subside enough to allow PCLN to soar again.
    Aug 13, 2012. 09:59 PM | Likes Like |Link to Comment
  • Priceline Not Likely To Recover Post-Earnings Losses In The Near Term [View article]
    So you are using PCLN to bet on QE3?

    Guidance matters a lot. It matters little if a company makes 80% margins last quarter if it says it will only make 10% next quarter...unless of course the company describes how the next quarter is a one-time anomaly and provides a convincing story about how it will return to that 80% or previous trend. We heard a lot of caution from PCLN in their guidance.

    I also wouldn't want to use this stock as a bet on a recovery in Europe. I would prefer an industrial/cyclical name like Siemens (SI) to do that.
    Aug 13, 2012. 09:52 PM | Likes Like |Link to Comment
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