Coby, take this note for example - a classic - #reply-8313022
<<Because of this the only way to get an assessment of the market state, the elasticity with respect to marginal supply or demand, which is a representation of the book state and on-balance market order flow, is to analyze every trade. Even if you have the raw every trade data, you have to have an analytical machinery that enables a proper assessment of the market state. As in quantum mechanics there is no continuous evolution parameter that tells you that if you have a set of eigenstates, then in the next time slice you will have a state configuration up to probability density, so you know the certainty of the persistence of state. No Markov chain of previous states can give you the next state space. You only know that the instantaneous state is more or less stable. When integrated back the differential state gives you an average state. Doesn't tell you what markets will do, just tells you how far out of normalized equilibrium they are and hence potential risk, not calculated risk.>>
He obviously understands both Quantum physics and Markov chains and their applications. No child's play subjects.
<<The sell-off in February lacked conviction so there wasn't enough market order sales to explore the downside. We are not talking about a thin market with an extended bear base behind it, we are talking about a very liquid state that attends the early phases of a general market top. As the top broadens, the market becomes illiquid. FED reassures the stock market with its regular coupon passes knee jerk response to a weakening in the TYX.X. That isn't institutional cash, it's government welfare. That means there isn't the tendency to pull bids as there was last summer. So whereas you get some downside that picks up the nearby bids below, the action falls into a temporary FED-provided pool of cash. When there is market order to sell conviction and bids are pulled and FED takes the pool away, you get Oct '87, hyper-illiquid state. This is not the state of the gold market currently.>>
He has a firm grasp of the relationship between money-supply and financial market movements. |
