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Harley Meyer wrote:
>
> I was going to respond earlier but have been busy. Email overload.
>
> (Some of you may of heard this from me before.)
> I was visiting the CME in Chicago and I was watching the S&P 500 futures
> pit. A woman was standing next to me talking to another gentlemen. I
> over heard her say that her husband was down in the pit. I was curious
> of course so I struck up a conversation with her. She told me about her
> husband, etc. One of the most important things she said was the guys
> over in the bond pit were a little bit nerdy. (She was making a
> reference to her husband and that he was not that into it.) She then
> turned in said that they are into Fibonacci numbers. But she guessed
> that I already knew that. No I didn't.
>
> The point is that if the guys in the pits are into some form of analysis
> it will show up in the charts. I remember someone earlier this year
> commenting that the only thing that works in some futures trading is to
> use Fibonacci because everyone else uses them. They also went on to say
> that some times the institutions will go against the Fibs to screw
> things up and because they can.
>
> So it is not that we are all part of nature but instead this a construct
> that the masses have chosen to believe to be what works. So the masses
> implement this strategy based upon some believe that it works. So if
> everyone is doing it you can't go wrong. This is true for Elliot Wave or
> any other form of analysis. Just as long as there are enough users of
> the technique to effect the market.
>
> I do have a degree in math. Not that this means anything. One thing I
> have found is that when other disciplines of study (sociology,
> economics, biology, etc.) incorporate math into their models they try to
> make to much of their model. I chuckle when my wife, who has a ph.d. in
> marketing, starts talking about modeling some event in marketing with
> math or statistics. It is about as bad as me going to Mexico and
> pretending that I can speak Spanish fluently. ( I can't, just enough to
> get by.)
>
> So not to burst anyone's bubble. But, it works only because there are a
> large number of traders who use the same techniques. It has nothing to
> do with nature.
>
I have a friend that trades in the pits in New York. He believes that the
reason Fibs and Tech anyl works so well is that so many traders use it the
numbers have to work.
It makes sense that when the numbers do'nt work the commercials are doing
their thing.
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