wednesday wonderwall waterfall, page-115

Anferni, to save Voltaire his time to explain this and since i have nothing better to post, here are Voltaire's words to how it works (have emailed them to myself for future reference) -


"For anyone trying to fathom my premium/discount idea of XJO/SPI you really need to look at history but if today is at par or premium then I hope this helps.

Yes a single outlier is usually an anomaly and worth betting against.

Just because we get premiums doesn't mean we can't go up.

If we have discounts and the market is rising it is pretty much a guarantee that the market will keep on rising.

If we then get past a single outlier and have modest premiums then that is "normal".

We then wait for excessive premiums to indicate potential capitulation on the upside.

All that can be applied vice versa to a downtrend."