Capitalogix

Borsellino: futures trading then and now

I just got back from chairing and speaking at a Quant/Algo Trading Conference in Chicago.  Very interesting!

While there, I met with Lewis Borsellino, a well-known S&P 500 and Eurodollar futures trader and author.

Here is a picture of him in the Pit, back in the day.

 

via TastyTrade.

In the mid-eighties, Borsellino claims to have been responsible for 10 percent of a day's volume in the S&P 500 pit and to have accumulated more fines for physical incidents than any other floor member at the CME.

We talked about how many of the advantages he had by being a big player in the trading pits are now being realized by algorithmic and high-speed traders.  I smiled when he called himself the "original spoofer."  

Here is a picture of him now.

 

Change is the only constant.

It's funny how despite the pace of  change, so much stays the same.

The playing field may change, but you still have to play the game.

Related articles

The CME will close most of its open outcry trading pits by this summer

Wall Street sounds off as the Chicago trading pits go quiet for the first time in 167 years

Here Are Some Links for Your Weekend Reading

Somebody has to win the election.  16sucks.com hopes it will be them, by selling "Everybody sucks" 2016 campaign signs to America's feeling about the two presumed main contestants for the presidency in November. 

Presumed Democratic nominee Hillary Clinton's net "strongly unfavorable" rating is hovering at about 37% these days (around 5% higher than the previous high for candidates getting close to the general election), according to FiveThirtyEight.

Meanwhile, Republican presidential candidate Donald Trump makes Clinton look beloved. His "strongly unfavorable" rating is sitting at about 53%, which is off-the-charts awful for a candidate who is supposed to compete for the White House. 

  

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• 4 Hard Questions to Ask about Your Company’s Purpose. (HBR)
• 25 Geniuses Who are Creating the Future of Business. (Wired)
• Can You Get Hacked Mid-Air? The Answer Is YES. (USAToday)
• Aging Runners Find Help for a Question: How Slow Will I Get? (NYT)
• 36 Pictures to See Which Muscle You’re Stretching. (LifeHack)

 

Trading Links:

• How Buyers React When Prices Rise and Fall. (New York Times)
• This is Why People Get Addicted to Gambling. (The Conversation)
• Hedge Fund Outflows Will Reach at Least $25 Billion this Year. (Fortune)
• "A Scramble for Gold Has Begun". (ZeroHedge)
• A Clever Algorithm Generating Millions of Random Ideas is Turning the Tables on Patent Trolls. (Quartz)

Here Are Some Links for Your Weekend Reading

The new GOP Symbol says it all.

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• The Incredible Power of Ignoring Everything. (Washington Post)
• 3 Scientifically Proven Ways to Optimize Your Brain. (Inc)
• Will the Singularity Mean the Death of Religion? (Kernel)
• How One Doctor is Waging War on Bulls**t Science. (Huffington Post)
• If You're Alive in 30 Years, Chances are Good You May Also Be Alive in 1000 Years. (HSK)
•  

Trading Links:

• Why We Think We’re Better Investors Than We Are. (New York Times)
• These 7 Iconic NYC Properties are Now Owned by the Chinese. (Video)
• China Central Bank to Fed: a Little Help, Please? (Reuters)
• Global IPOs at 7-Year Low. (Insider)
• Dark Days are Here Again on Wall Street-Investment Banking Earnings down 36% YTD, Lowest since Q1 2009. (David StockMan's Contra Corner)

Two Steps Forward, One Step Back - Still Leads to Progress

Here is a photo of the Capitalogix team noting a successful test release.

 

 

When you play a big enough game ... the journey is long ... and it can't just about the final result. 

On a day-to-day basis, it is about sucking less, measuring progress, moving forward ... and remembering to celebrate along the way.

Remember, the tip of the iceberg is only part of the story.

  

The Iceberg Illusion by Sylvia Duckworth, (Flickr CC license).

 

The Iceberg Illusion reminds us that when you see a company killing it - most of the time, all we got to see was the success part at the top, not the struggles and failures it took to get there.

Here's to the focus, learning, resilience, and patience that got us here!

Onwards.

Here Are Some Links for Your Weekend Reading

Behind the Scenes: How the FBI Solved It's iPhone Problem.

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• Dan Sullivan Defines Unique Ability. (Video)
• Why Creating a To-Do List Is Derailing Your Success. (FastCompany)
• Find Out How Much You’ve Spent on Amazon Since Opening Your Account. (LH)
• This Is Why Women Live Longer Than Men. (Brightside)
• All Politicians Lie. Some Lie More Than Others. Here is a Comparison. (NYT)

 

Trading Links:

• Is the Stock Market Still Rigged? (Time)
• JPMorgan Has New Theory About What Really Caused the Flash Rally. (Bloomberg)
• Wall Street Banks are Using Artificial Intelligence to Monitor Traders. (BizInsider)
• Islam in Europe: Perception and Reality. (Economist)
• Expect More Money Printing. (ValueWalk)

Here Are Some Links for Your Weekend Reading

Oh well, the hour we lost this weekend was the one I planned to use to go to the gym.  Maybe next year?.

 

via Someecards.com.

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• Tomorrow's Advance Man. Marc Andreessen’s plan to win the future. (NewYorker)
• Want Your Children to Survive the Future? Send Them to Art School. (Medium)
• Uber Teams Up with Airbus for On-Demand Helicopter Service. (TPG)
• The 'Hidden Airport' Travel Hack Could Save You As Much As 80% On Flights. (TI)
• A Spanish man didn’t report to work for six years, and no one noticed until he won an award. (National Post)

 

Trading Links:

• The Exchanges Are Eating Your Returns. (Bloomberg)
• Artificial Intelligence Market Worth 5.05 Billion USD by 2020. (MarketWatch)
• What Does This Mean?  IBM Revenue Fell for 15th Straight Quarter. (Fox)
• Why Are Corporations Hoarding Trillions? (New York Times)
• China's $34 Trillion Experiment Is Blowing Up - Kyle Bass. (ValueWalk)

After a Quick Rally, The Dow Jones Industrial Average is at Resistance

Impressive rally ... Now what?

Here is a weekly chart of the DJIA.  Price has rallied to the overhead support/resistance level and its 40-week moving average (which is also its 200-day moving average).

 

via StockCharts.

 

Meanwhile, according to StockCharts, the percent of NYSE stocks trading above their 50- and 200-day moving averages is soaring. Currently, 73% are above their 50-day lines (which is close to the level hit during the November peak) ... and 34% are above their 50-day lines. That reflects the short-term improvement gained during the last month in major stock indexes.

What happens here, at the resistance barrier, will help determine if the short-term rally has more staying power.

Here Are Some Links for Your Weekend Reading

A reminder ... Every morning you have two choices: continue to sleep with your dreams, or wake up and chase them.

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• Michael Bloomberg Could Make Donald Trump President. (Slate)
• Why People Are Confused About What Experts Really Think. (NYTimes)
• "Memory Hackers" Shows The Future Of Memory Manipulation. (FastCo)
• Malcolm Gladwell: This Is How You Develop True Expertise. (Inc)
• Artificial Intelligence. Computers are being taught to learn, reason and recognize emotions. In these talks, look for insights -- as well as warnings. (TED Playlist)

Trading Links:

• VC Expects that Most Companies Will Eventually Pay an Amazon 'Tax'. (Insider)
• The Hottest A.I. Companies Making Waves Across Industries. (LTP)
• U.S. Budget Deficit Falls to Lowest Level Since August 2008. (WSJ)
• How Soon We Forget: Investors Lost $1.78 Trillion In Year's First Six Weeks. (Time)
• A Financial Road Map For 2016: "The Potential For Chaotic Fluctuations Is Greater Than Ever". (ZeroHedge)

Trading After Groundhog Day

On Groundhog Day, Bespoke put out these charts and comments (with minor edits).

 

When Punxsutawney Phil Speaks, People Listen

 

Forget about EF Hutton, or for that matter Warren Buffett.  If you really want to know where stock prices are going and can’t wait until the Super Bowl, look no further than the Oracle of Punxsutawney, Phil the groundhog!  Given his ‘perfect’ record at predicting the weather, we wanted to check up on the groundhog’s ability to predict the direction of the stock market.

Going back to 1944, when Groundhog Day resumed following a brief pause during World War II, Punxsutawney Phil has seen his shadow on the morning of February 2nd 59 times and seen no shadow just 13 times.  The table and chart below summarize the performance of the S&P 500 from Groundhog Day through the first day of Spring in each year based on whether or not Phil sees his shadow or not. (Disclaimer: If you are reading and still think this post is meant in any way to be taken seriously, it is not.)

  

 

 

On years when Phil sees his shadow, it not only means we are in for a longer winter but also sub-par stock returns.  In the 59 years where Phil has seen his shadow, indicating a long winter is in store, the S&P 500’s median return from that day up until the first day of spring has been a gain of 0.54% with gains 54% of the time.  Those returns don’t sound so bad, but they are actually below average.  That’s because in the thirteen years where Phil did not see his shadow the S&P 500 saw a median gain of 3.01% with positive returns more than three-quarters of the time.  

As shown in the lower chart, there are only three years (1997, 2007, and 2011) since 1944 than Punxsutawney Phil did not see his shadow and the S&P 500 declined from Groundhog Day through the first day of spring.  Of those three years, the worst decline was 2.17%.  With the S&P 500 already down 1.6% today, the S&P 500 has some digging out to do if it is going to continue its trend of winning ways following those days when the groundhog doesn’t see his shadow.  It’s so easy a groundhog can do it!

 

Right ... so, you know that was poo poo de moo moo. Punxsutawney Phill doesn't predict markets.

This year started with an 11 % drop.  While that is the steepest drop to start a year,  I'm pretty sure that doesn't mean much either.  With similar numbers, the market ultimately went down 32 % in 2008 -- and up 33 % in 2009.

Markets go up - and markets go down.  It's not what happens, it's what you do that matters.

What Knee Surgery Reminded Me About Technology

This week, my son had knee surgery.  It made me remember my knee surgery from three years ago ... And, it reminded me about what technology makes possible.

Before my knee surgery, I wasn't enjoying the prospect of the needles, the knock-out drugs, the cutting, or the recovery process.  Frankly, I was scared.

 

 

History is littered with tales of once-rare resources made plentiful by innovation. The reason is pretty straightforward ... scarcity is often contextual.

Imagine a giant orange tree packed with fruit. If you pluck all the oranges from the lower branches, you are effectively out of accessible fruit. From that limited perspective, oranges are now scarce. But once someone invents a piece of technology called a ladder, the problem is solved.

Here is a picture from inside my knee (unlike years ago, they didn't have to rip me open to gain access for the picture or the repair). Less damage, less time, less drugs, less recovery.

 

 

Bottom-Line: I walked over 2,500 steps the day after the surgery.  This time, my son and I had a burger on the way home from his surgery.

Whether it is minimally invasive surgical instruments, or linking big data and elastic computing ... Technology is a resource-liberating mechanism. It can make the 'once scarce' the 'now abundant' (or 'readily accessible') ... and a lot less painful.

Pretty Cool!