In edit and a nice swoon in BSTE allowed reestablishing third serving here at $43.66... earlier (while I was typing this lengthy note) CCMP got bought at $52 flat. GNSS was also bought at a discount here at $17.06. (now at 40% cash...)
The reason is quite simple, while the March 11 low, was according to the model a local low (and thus suggestion at the time to cover the "safe shorts") it did not have any of the signs of a major low. The reason why the turnips failed are purely statistical and the fact that the model has no way to estimate singular events. I am not sure what was the "singular event", but my guess is the rapid Iraqi victory, the fact that in essence we did not get bogged down and the assumption that crude will go rapidly to $25 or so (and it did). Maybe the tax relief is viewed positively by the market as well, and last, it is possible that all participants expect the normal pattern of strong market in election years and thus jump the gun ahead of time.
The model does not work all the time, and despite the fact that it is not in tune here, it is not causing much damage either.
Zeev
