I went to the crèche to collect my young child. There was a play area in which playdough was there for the entertainment of the children. The playdough was all different colours. It was all different sizes and different shapes too. It looked random and disorganized.
I went to the biscuit factory and saw a big conveyor belt. On one side was a big container full of some kind of dough or pastry. It was like playdough, with no shape and this went into one end of the conveyor belt production line. There was a series of different machines in the middle and at the other end the conveyor belt brought out rows of nice tasty looking biscuits. The biscuits were all a different colour from the dough which started the journey through the production process. They were all the same shape. They were the same size, and equally spaced from each other. There were all identical colour as each other.
You might say that the production process had stamped a certain similarity upon the dough. Now after reading a Harry Potter I might have decided that little elves were operating unseen inside the machines manipulating the dough and organizing things to suit their hidden purpose. But I didn’t think that because … well … it didn’t even occur to me to consider it.
While I was walking home I looked up and in the sky a flight of geese passed by above me. The flock of geese was in a lovely Vee shaped formation. But geese are not intelligent, or so I have been led to believe. So what was going on? Those geese were definitely flying in a similar way to organized pilots. Who was organizing them and where was he hiding, and most of all, why? Ah but geese have been flying this since before man came along on this planet, so what about reversing my suspicions?
But those geese definitely looked organized. Something must be going on.
This is one theory: https://www.stanford.edu/group/stanfordbirds/text/essays/Flying_in_Vee.html
So as I walked down the road some more a whole lot of cars passed me all in a line, nose to tail. Then there was a gap. Then more cars came all together. There was definitely some organization about this. But they all had different drivers, and I am sure they were all from different places and going to other different places. But those cars sure looked like they might be organized they way they all travel in groups. Later I came to and crossed the road at the traffic lights. When I pushed the button the cars all stopped so I could cross the road, and a bit of a queue developed while the stop light was red. After I crossed I continued on towards my home, and didn’t bother looking back, but I heads lots of car engines revving up at the same time behind me for some reason.
A murmuration of starlings could be seen in the distance. It was fascinating to watch as I walked towards my destination. Wow! A highlight of mother nature right there to simply watch and enjoy! How do they do that?
It is nice to get out for a walk during the spring time. The weather is so much nicer that it was several months ago. I don’t have to wear that bulky warm winter clothing to keep warm, and the sunshine is so much brighter and warmer on my face. I looked around and the other pedestrians who were out jogging, or walking, or with dogs on leashes had also noticed this and we were all dressed in suitable clothing for this pleasant day. I wondered who they were and where they were going for a fleeting moment but I didn’t have the foggiest idea. It didn’t seem to matter, though we were all enjoying the sunny day.
The newspaper shop seemed quite busy as I walked by. The Irish elections for local representatives and members of the Eu parliament was in the headlines of some papers. In the UK newspaper I could see pictures of Nigel Farage probably because his UKIP party did well in UK elections this same week. As I walked by the hairdressers and looked in the window the TV showed coverage of an election in Ukraine. So many elections this week ……
I crossed some free ground and the young rabbits could be seen. They look so cute! But somewhere close by I’m sure a vixen will be looking after her fox cubs and will need to feed them all summer. So many young rabbits here close to each other. I wonder will the fox decide to come here and catch a few for her young? I’d better appreciate seeing those little bunny rabbits today because I might not see so many together in one place until approximately this time next year. It crossed my mind that other folks might not appreciate the drawing effect of so much fresh meat would have on the foxes, but that’s how predator prey relationships go. It’s like the stock market in a kind of a way I thought. Too many newbies and there’s sure to be a surprise price change to cause them to lose their money! Ah those were painful lessons I had to learn back then. Expensive lessons! Wish I still didn’t get so many surprises today, but that’s the market, full of surprises you can never predict, and some you can.
Plotted without time, predator against prey, it looks a bit like one of those murmurations:
(Source: https://en.wikipedia.org/wiki/Lotka%E2%80%93Volterra_equation)
I considered just for a moment – the idea sort of hit me out of the blue – what if a flock of birds flying along all flew from warm air into cold air, which would be invisible since it’s just air – would they all turn at the same time? As if they had some secret communication system, but you know, they actually all just went “Brrrr that’s too cold I’m getting back into some warmer air” at the same time! An invisible reason why they all decide the same action at about the same time …. dumb animals! Only people can think! Right?
And for some reason I thought about markets again. I don’t know exactly why.
I got home and my wife spoke to me about summer holidays. She said we had better book flights early because everybody will want to do the same and there might be few or no choices left. We don’t want to get forced into going somewhere we didn’t choose of our own free will. And we would like to have the best choice of flying times, so had better book early and let everyone else get crammed in the holiday traffic peak times.
I switched on my computer and started to read about manipulations of the gold market, and big fines that banks will have to pay for doing bad stuff organizing price moves to suit their purposes. Some high earning dealers have lost their jobs, and some big banks are trying to sell their London Fix seats, but I heard they can’t find bidders. Those crafty Rothchilds! I smiled to myself. They got out well before all this fix manipulation enquiry began. They moved out early! The ones getting out now are late and are going to find their delay cost them!
I wondered about the manipulations the banks did. Maybe a manipulator made price move, and everybody else took their action based on the moving price. Ah that would be technical analysis, following price. The cars taking instructions from the traffic light system passed through my mind for a second (Did I manipulate the traffic when I pushed that button?For a while maybe.) and then the thought disappeared. The thought is gone except for these typed words, and I guess if everybody reacted the same way at the same time due to a manipulated, or even naturally moving price I suppose there would be no written communication of that either. Unless the original manipulator, the original mover and shaker happened to be really stupid.
Even political elections all arrive at similar times, traders arrive at their desks at similar times and commence to trade at similar times. Manipulation to kickstart things, others following the signal in a technically methodical sort of way, some natural sychronized timing thrown into the mix, and also some action-counter-reaction by one side to an abundant number on the other side added too. All these factors to consider and think about - markets are fascinating aren’t they?
How much price move was up to their actions and how much was periodic, or semi periodic due to external reasons? I guess I’ll never know.
So I went out to the garden and looked at the swing. It’s such a simple thing, a swing. But you better watch out. Try to push a child when they are coming back at speed and you could get a nasty bump in the face. Or push when they are at the far side and you hit thin air and might fall down! It’s not necessary to actually consider swings all that much. I just wait until it swings to an extreme at my end, and as it slows to a stop, give my child a mighty push. It’s necessary to keep a careful eye open or it’s surprisingly easy to get such a simple thing wrong! Done reasonably ok, this always seemed to put a big smile on his face.
On a foggy day without clear vision it would be more difficult I thought. I would have to watch the timing of that swing a lot closer to get it right and not receive a nasty smack from the backswing. Imagine how hard it would be if the length of the swing ropes was constantly being altered by someone who owned the swing and it was dark or foggy so you couldn’t see. That would be quite the challenge wouldn’t it? If I got hit too hard or too often it would be pretty difficult to stick at it! But accepting a certain number of knocks and bruises, and watching out for myself, and I reckon some determination too, it just might be sorta kinda possible with enough care and practise.
Organized vs random; natural vs artificial; independent vs reactive feedback; seasonally rhythmic vs random; symmetrical vs assymmetrical; manipulation vs independent – how much of each is in the mystery market mix? Reminds me of what Hamlet said: "To be or not to be. That is The Question!" They never really figured out which words to emphasize in that sentence, did they?
It’s all just so fascinating this gold market! You can keep football! I'm watching gold instead. It's got everything going on in it!
Argentus Maximus
The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.
