Wide Ranges, from Victor Niederhoffer, December 13, 2007

There is much talk about how to interpret the bearish Open Market Committee announcement followed by the bullish joint injection of reserves which led to the greatest absolute value of moves ever from 2:30 to close and close to open, 85 S&P points in total.

Many will try to interpret the content, the whys and wherefores of what was done, and the timing thereof, but I am tempted to cut to the chase and say that it is the like the final blast of the fireworks, or the finale of a classical symphony, or the final minutes of a sporting event such as a bike race or basketball game or 100 yard dash, where everything hangs on the last ultimate effort.

Rather than searching for more analogies, I will go out on a limb and say it appears to be the final disruptive move, the boiling water that the frog is thrown into to get him to jump, the greatest observable difference of Fechnerian Psycholoy. Merely the final attempt to loosen the weak from their positions.

There's the rub. Which side is trying to loosen which? I dont know. There have been seven days in the last 12 years where, like the last two days, there has been a high to low range of more than 45 points. The range Dec 11 was 56 points, and Dec 12 was 46. The last time it happened was Jan 3, 2001, where a 46 point range was preceded by an 81. Of the seven occasions, three were followed the next day by a rise, and four by a decline.

In closing we must tip our hat to the highest up open in futures in history (on a non holiday), up 34 points yesterday, only surpassed by the 36.5 on June 2, 2000 which followed a Memorial Day holiday, and surpassing the 32 point up open on the day after the Fed first lowered the discount rate this year (August 17, 2007).