Friday, July 29, 2011

Making Money Through


In the lower portion of this chart, there is a modified sine wave pattern to help visualize the behavior of the cycle in the SP500's price movements.  The market was following this cycle pattern very nicely up until late 2005, and then it jumped onto a new schedule that just happened to be about a half cycle length off of the original schedule. 


So with the knowledge that a phase shift was a possibility with this cycle, it was hard to understand what was happening in early 2008.  And this illustrates one of the big pitfalls with doing any sort of cycle analysis: cycles can change, and so while they may give us nice predictions of what should happen at some point in the future, there is no guarantee that the past behavior will remain in effect in the future.


It just so happens that 2007 was when this cycle changed, and it was also the year that the uptick rule for shorting stocks went away.  It is hard to understand why a rule change like this could make a difference on a market cycle, but I have an explanation that may help.


Imagine a wave pool in a laboratory, where scientists create waves to study how they travel through the water.  Now imagine that you remove all of the water, and replace it with 30-weight motor oil.  Because the oil is lighter but more viscous than the water, the behavior of waves in that wave pool would understandably be different. 


So thinking of the financial markets, if the regulators were to do something that changes the "viscosity of money", making it flow more or less easily, then we would likely see changes in the way that waves propagate through that medium as well.  Such changes might include restrictions on shorting stocks, the advent of money market funds, the introduction of stock index futures and options, leveraged ETFs, etc.  All of these affect the ease with which money can flow into and through the stock market. 


Now, if you look back at the top chart, you can see that the blue numbers are getting bigger again lately.  Those numbers represent the time period between the major lows of this cycle (formerly known as 9-month).  The lowest number was 159 trading days in early 2008, and it has climbed back all the way up to 177 as of the latest major cycle price low.  It may be that after the initial shock, this cycle is working on getting back up to is "natural" frequency.  Or it may be that 159 and 177 are just the widest extremes of a new range of cycle periods that average more like 168 trading days, and that this is the new natural frequency.  We won't know for sure for several more cycles' worth of time, and that's the big problem with this analytical technique. 


For what it's worth, and to help your planning, 159 to 177 trading days from the most recent major cycle low equates to a timeframe of Oct. 31 to Nov. 25, 2011.



Drita tells HollywoodLife.com exclusively why she’s splitting from her cheating husband: ‘I could never lay with a man that I know was with someone else!’


During the season finale of Mob Wives, star Drita D’avanzo found out that her husband Lee D’avanzo had an affair during his stint between prison sentences. Because of this Drita decided to consult a divorce attorney on her options and refused to tell Lee that she was doing so. But since then, Drita has confronted Lee about his infidelities and decided to go through with a divorce!


“Right now it looks like I’m going to 100% [get divorced],” Drita tells HollywoodLife.com exclusively. “I did speak to him and we do not speak anymore since I confronted him about it. We don’t talk.”


Lee lied to Drita about what happened. “He said exactly what I thought he was going to say,” says Drita. “He said it wasn’t true, but I know it is. It’s just something that I don’t see him confessing to. I don’t really need his confession, I just need him to know that I’m not going to be there for him anymore.”


“It’s not easy, but I’m too prideful and I could never lay with a man that I know was with someone else,” continues Drita. “I can’t do it. I’m still heartbroken.”


Because of what Lee did to her, Drita doesn’t know what the future holds for her love life. “I don’t think I’m ever trusting anybody ever again,” she admits. “I’d rather be by myself than with somebody I can’t trust. I’m used to being alone.”


Right now, Drita’s just trying to remain positive. “I’m putting my mind and energy completely into making money on my businesses with my cosmetic line, Just Me, and the workout DVD coming out,” shares Drita.


“Always have something to fall back on because depending on the man is the worst thing,” Drita advises other women who are going through similar situations. “And keep your friends! I’ve seen so many lose their friends during their marriage and stop working — they depend on their husband. That’s why they’re staying because they’re stuck. I feel like there is a noose around my neck — that’s why I’ve always worked.”


And Drita only has one message for her soon-to-be ex-hubby, the same one she delivered to him when she confronted him. “I said, ‘You really did make so many mistakes in your life, but this could be the worst,’” Drita says. “‘Just to lose your family, it’s not worth it.’”


- Lindsey DiMattina


More Mob Wives Stories:



  1. Karen Gravano’s Embarrassed Her Daughter Saw Her Fighting On TV!

  2. Drita & Karen Still At War After Season Finale!

  3. Karen: I’ve Got Soldiers & Cannons Pointed Right At Drita!



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