Is The Fix In?

Dolby and Unisys Report Earnings

Two of my MFI stocks reported earnings this evening after the bell.  UIS and DLB.  I am pleased to say that they both had strong earnings.  As we have happy hour trading, UIS (Unisys Announces Fourth-Quarter and Full-Year 2012 Financial Results) is up a bit more than 10% and DLB (Dolby Laboratories Reports First Quarter Fiscal 2013 Financial Results) is up about 3.5%.

So should be a decent day tomorrow.  Today was pretty solid as HFC and MPC were up 5% on the back of very strong earnings from Valero (Valero Profit Rises on Cheaper U.S. Crude).  MPC will report earnings tomorrow, so it will be interesting to see if momentum continues.

The interesting chart of the day was UIS, which was trading down 3 to 4% all day... until the final 15 minutes when it spiked on heavy volume.  Clearly, some people had a little advance notice that it was to be a strong quarter.  Now, I hate this, even though it doesn't "cost" me anything.  It is just so wrong.  It did get me to thinking how one could take advantage of it.  Clearly the answer is to watch you stocks closely the final 15 minutes and be ready to trade based upon abnormalities.  Of course I have a job, so that is not realistic.

UIS Minute Chart - aka "the fix"

Freakonomics

They say the key to winning poker is "the tell", where you are able to read your opponent.  Clearly that can also be applied to stocks, where you could "read" a chart like this and tell the fix was in.

A great book that talks about the usage of statistics and economics to solve problems is Freakonomics.  They show how they identified schools cheating on standardized tests in Chicago, why murder rates have dropped in past decade and how to tell when a sumno wrestling match is fixed.

They also hinted at a way to tell when a horse race is fixed and that there is a way to profit from it.  That has intrigued me for five years.  Someday, I am going to download a couple months of data from the Daily Racing Form and see if I can figure it out.  I do have a couple of ideas... maybe if I crack the code, I can spend a day a week at the track after I retire.  Any thoughts?