Nice post Eliezer. Fascinating, really. It would be very interesting to see this theory tested.
Though one problem is that you assume that Monday’s close + 777 is the “neutral” starting point. Despite the fact that the bailout proposal wasn’t made public nor finalized until Sunday night, we can expect the market to have anticipated some form of bailout with some likelihood of passage long before Monday. So we’d have to go back a bit further.
Nice post Eliezer. Fascinating, really. It would be very interesting to see this theory tested.
Though one problem is that you assume that Monday’s close + 777 is the “neutral” starting point. Despite the fact that the bailout proposal wasn’t made public nor finalized until Sunday night, we can expect the market to have anticipated some form of bailout with some likelihood of passage long before Monday. So we’d have to go back a bit further.