03/24/2012 Weekend Watering

[stevej]

What is up with the futures??? Dow down 100 ndx up 27???

[SWalsh]

I just wonder if HFT are really that important as your writings suggest?

I will refrain from posting the obvious (probably 95% of spikes are computers] as obviously some feel it it is interfering with their decisions. Just please post when you realize, "HOLY CRAP...was that guy ever right!"

If they indeed are pushing the markets I ask them to do that with even more conviction, this helps me make money .

Unless you can see what they see you will never profit from their activity. Literally, by the time your screen updates it has already happened. The market is racing to zero.

I think we all are here to make money and not revolutionize the way the Wall Street works (Pardon my expression if you don't like it). Lets stay on our objective!

It's not that I don't like the expression; I find it makes no sense (and please pardon me for putting it in that form as I know no other). Wall Street has been revolutionized. Black boxes are not transparent and there is every likelihood that they see all. Look at the summer of 2008 and the avg range. Look at a year ago and the avg range. Look at the mkt now and the avg range. Dismissing who is controlling this market to the point of micromanagement and exploitation of what were "edges" that worked for probably 60 years means one must decided to not look at the patient and understand why, as an extreme example, blood letting by Steve Martin as the Middle Ages Apothecary is generating cadavers. My viewing of what I "think" is going on is forensic in nature. I do not know a way to profit from it as they turn on a dime (actually 1/10th of a penny) at times. But one can be left with evidence of a 600-1000 share quote stuff with one hit alone, that appears in under one second, to be the reason for a market turn. I will give former head of the NYSE, Grasso, his due when he states they are parasites and need to be removed as they are destroying the markets. I'm guessing his circle of friends include large money managers and not The Lloyd or Jamie Dimon, and they are not happy about the edge given to the HFTs.

As to DeMark, I know more about celestial objects having owned a high-end telescope at one time. I have no idea if it is open to interpretation to a degree. I know two electrical engineers who have independently programmed it into a platform. They are also looking at the HFT activity. They have told me it is getting nailed by the computers now right after the signals are given. It makes sense in any game or chance/risk that one with more money targets the actions of those with less. The amount of money one had to play with was never a deciding factor in market direction over any period of time. Now it assuredly is and that is more like organized crime given the helm of a game and told to play fair (wink!, wink!).They don't need to be right to win now, they just have to make the rules. I am convinced after a good deal of observation that HFTs ARE the market. I have read that most of these systems now never have a losing day. There hasn't been this race of PhDs to Wall Street (after we stopped the Super Collider in 1993) that came up with higher math equations to predict market moves. They have programmed to take advantage of lesser developed programs and risk is not in their equation. If you subscribe to StockTwits you'll see the individual that markets HFTAlert use the word "manipulate" regularly. His page (search Google for the link) has some good videos explaining what they do. Perhaps it's me, and two others, but I have yet to figure how to benefit from seeing 2-5 seconds later what they did other than to say they really seem to like trendlines and channels as of late.

YMMV

[Buckethead]

BOND MARKET

SPX_TNX.png

The current "Chart of the week by Tom McClellan" has an interesting explanation of what is behind rising stock prices. Here is the chart.

spy.png

And here is the explanation. http://www.mcoscillator.com/learning_ce ... versus_m2/

Yeap, depends on what age we're in, yield and stock may trend differently. I think we're back into inflation age now.

I agree. I believe the most unexpected is 10 year yield goes to 0.50% and equities rise to 25,000 dow next 3-5 years. real inflation would inflate equities this time. this would be a kind of black swan event where "no risk" bond short trade gets decimated and equities rally big.

[xfradnex]

For SWalsh- SEC Probes Rapid Trading. See video on http://www.marketwatch.com/video/asset/ ... D0B462979D

Hope they are not being paid off to look the other way. They talk about leveraged ETFs causing all the problems; maybe, but it seems that these HFT guys can do a lot more damage, especially if they use leveraged ETFs.

Thanks for the link.

Towards the end the reporter essentially said that the HFTs should get an advantage for maintaining an orderly market and taking risks. That is what a specialist used to do. Are they defned now as a specialist? I don't think so. When I see a losing week by an HFT (or how about a losing hour?) I'll believe they take risks.

So we have, essentially, a propaganda piece. Unless you have Madoff II to provide a photo-op illusion that leads to SEC press and promotions, or a Bosesky/Milken situation, they don't care. Why do I say that? Because I don't just think they don't care, I know they don't care. Let your mind wander.

The SEC can play the "we don't fully understand it yet" game all they like. But it is rather simple to see that HFTs will quote stuff to slow down the tape to prevent moves they do not like, or to generate a greater latency so that they can act.

NYSE requested, as per NANEX and links I posted here, that regulations be put in place that required a time for the trades to remain in the system. That would make them susceptible to them getting hit with positions they do not want as well as not being able to manipulate as they do as the frequency would diminish. They read the complaints and opinions and stated they would instead monitor and fine abusers OR, "I'm with the government.....I'm here to help". But here is the very understandable part of this - there is a virtual guarantee that those offers, such as a high I've seen of 1000 stocks offered in a one second burst of quotes of some 6,000 stocks listed and 600 usually 2-3 times a day, have to be naked short sales. And unless I missed a change, that is either extremely limited or outright banned at this point in time. I was told they get around it by claiming they could buy the stock elsewhere in moments if need be and that they are just doing arbitrage (profiting off a momentary difference in price of the same equity) which strains credulity.

The SEC is not going to do anything. Mary Shapiro was useless as Chairwoman of the CFTC in the 90s. They will do what they can to nail the little guy and justify their existence. There was an SEC lawyer who was fired and won about $700,000 for wrongful termination when he barked too much about a case he was about to try, as per Matt Talibi of The Rolling Stone, but former DA for the NY Southern District, Mary Jo White, talked the SEC out of all charges and the case was dropped. That's what drove the SEC lawyer nuts and he was fired.

Perhaps at some point in time the Mutual Funds Industry will garner enough power to get them to do what former NYSE head Grasso said, "Rip them out".

The exchanges have bookies now that are paid a vig AND they can throw the game. They can also concoct small cases to lose and tie-up the SEC and set their own fines in Settlement Agreements. Banks used to be safe havens for the money of the citizenry that held a steady stock price and paid small dividends. But the banks again needed a highly leveraged 1920s playing field, as the theft from poorly managed nations ran out of sovereign entities and they took a hit on debt about 15 years ago, where a Fed Window essentially plays directly in the market, or loans the money for others to do so in a quid pro quo.

They are destroying the manner by which capital is raised in America and Kondratiev would say, "I told you they'd do it again". But I don't expect the most corrupt administration in US history to stop them as they benefit from this Wall Street connection. But don't think I hold Bush innocent as I do not. Where the biggest problem lies in the potential groundwork for a revolution. And they are allowing this institutionalized rape to continue despite the public outcry against it. I wish Sinclar Lewis wrote a follow-up to his Nazi warning that we did not heed and entitled the book, "It Will Happen Here".

Thanks again....I guess I can go to bed now. Sleep apnea sucks when you get an attack and a massive adrenaline rush. I've been up for almost 24 hours. Commenting gave me something to do and an issue to chuckle at. The SEC might act....HA!

Correct me if I am wrong here. If you are submitting a market buy/sell order during a time the market is making a move and HFT occurs, your trade will be delayed. That delay will give you a much worse price if the buy/sell was not delayed. If the HFTraders use another trading feed they can enter a trade undelayed and take advantage of this situation (receiving a better market price). In another senario, if the HFTraders are already positioned long and the market is making a move up, and HFT starts, then the Bid /ask spread should increase(like after hours trading) because actual traders are being locked out; the HFTraders will receive a better asking price.
Excersize

[Jose]

Hello all!

In this weekend thread I will leave you my EURUSD vision. Failure to break 45 on RSI was a pretty bullish sign. It's trying to hang out over 55 now which would be great for Bulls.

Numbers just represent the trades.

After I was stopped in this last one it seems it really wanted to go at least to the grey line afterall...

Gonna catch some few hours of sleep now. See you tomorrow.

[SWalsh]

Correct me if I am wrong here. If you are submitting a market buy/sell order during a time the market is making a move and HFT occurs, your trade will be delayed. That delay will give you a much worse price if the buy/sell was not delayed. If the HFTraders use another trading feed they can enter a trade undelayed and take advantage of this situation (receiving a better market price). In another senario, if the HFTraders are already positioned long and the market is making a move up, and HFT starts, then the Bid /ask spread should increase(like after hours trading) because actual traders are being locked out; the HFTraders will receive a better asking price.
Excersize

IMO, you just gave a very concise example, as I understand it.

I am not an expert at this, lest someone think I am, and I doubt you will get an expert to reveal what they specifically do. They are probably all paid quite well and have signed non-disclosure agreements. If you recall the collapse on August 9th that turned up with the false announcement by Goldman Sachs after Fed Minutes that QE3 was coming, I read that they brought Nasdaq to 92% of the quote limits in the system that would crash all of Nasdaq and require a reboot. They were quite concerned as that has never happened. For starters, all bids and offers would be wiped out in a reboot. They also do not know how long a reboot would have taken and if some trades were in question for days. Can the "Flash Crash" happen again and on steroids? Given that they just told us that the banks are in a better position now and could weather the likes of the Great Depression, I guess that Black Swan Clock just moved close to one happening. It would appear that the only thing we know is that we do not know what is now possible with these machines, and finding out might be historic. I just don't see how this cannot have adverse effect on raising long-term capital at some point. What we do know is that it won't be John Corizine ordering our accounts cleared out. (I'm hearing "Evita" playing in my head )

[xfradnex]

Talking about crashes. Joseph Glanville, said we toped out on friday, with maybe 2 more days up. He expects that 1000 points down for each of the next 4 quarters. see video http://www.bloomberg.com/video/84758540/. For fun, make the assumption that Republican are in control of the stock market (in some fashion) and positioning themselves for the presidential election. What would be best for the stock market to do: crash going into the election. Also assume that, the market needs to go up enough so that there is enough downward room for another crash to take place (check). We could also assume that the market cannot go any higher that the 08 crash, because that would mean success for Democrats (check). Most of these guys are wrong, but if you give a dart to a monkey to throw at a prediction chart, you may have the next anointed genius.

[SWalsh]

For fun, make the assumption that Republican are in control of the stock market (in some fashion) and positioning themselves for the presidential election.

That's hard to do as I don't think they steal in such a brazen fashion.

Try the EGG of DOOM. Steveo charts some unique things part time at Hawaii Trading when he is not working installing solar panels. This is rather fascinating. Granville's interview appears to be from late January and we have slowly rallied almost 600 Dow points from his "straight down" comment.

If anyone knows if Marty Zweig is around anymore, what is he saying? Wall Street Week is on YouTube and the Friday before Oct 19, 1987 he said he was extremely worried about the market for some time and only then decided to state it publicly. If I recall correctly, the woman from some brokerage association group said it was a health drop. Probably Cramer's wife or mother...

[xfradnex]

This egg is not sunny side up? Not over easy either. The MACDs look compelling.

[xfradnex]

Here is the easy TVIX story. UVXY is a copy ETN. Looking at the bottom chart you see decoupling of the two on Feb 21 until now (almost). Currently, TVIX should be around 15 to 20cents lower than the current 7.00 price ( 6.8x). Even using UVXY for TA, we are still not at a bottom; see second chart. Note the volume increase on UVXY; people moving from TVIX to UVXY. Should trust be given to these instruments? They are still not doing their jobs(counteracting volitility); there was no real movement of these two when the SNP had it's recent lossing streak. Anyway. I think the real news here is that people are still hanging on to these instruments even though they have gone predictivily down over many months. Maybe when we see volume going down on both of these ETNs(all clear), that would be the time to reconsider(catch everyone going long)

[Auole]

Weekend watering? more like an einsteinian drizzle. Thanks all for all the info.
Well, butterflies within butterflies within butterflies. Learning Wolfewaves.
Just WHAT IS gold doing?? What am I doing-long,short,SOH (sitonhands)?!
Interesting. Many wolfwave targets are hit. Hindsight is easy.
It's the forward stuff that gets all messy. Chart 1: big picture.
Chart2: more detailed & recent. As Cobra would say, my bestest guest.
Chart 3-2008 big correction. Amazingly similar and much clearer
wolfewave behavior! Background bolli noise is homemade Standard
Deviation.

[Jose]

Update on EURUSD

Previous Post viewtopic.php?f=2&t=496&p=68377#p68371

It went through the roof top, it will be vey hard to trade for me from now on, best scenario for a future trade for me on the hourly chart is: it keeps rising a lot for a while, when it needs a rest it will come to test the EMA 50, MA 99, MA 200 (this is valid only after a nice bull run).

Also I will keep an watch on the 4h chart, it needs to go above 55 to validate this hourly breakout.