yes I knew that, it was Memorial day. market still traded tho, and in the right direction too. but yeh overall things were very quiet.
haha miner. yes a confluence of harmonic patterns was irresistible to me.
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yes I knew that, it was Memorial day. market still traded tho, and in the right direction too. but yeh overall things were very quiet.
haha miner. yes a confluence of harmonic patterns was irresistible to me.
Originally Posted by Hoop http://www.sharetrader.co.nz/images/...s/viewpost.gif
From all the posts presented on this thread lately it seems there is a common consensus that this present rally in the US Equity markets may be over.
Cross out the all and add minority now.;)
stop was at 877.6 so it held through those dark moments. woke up to a nice limit having been taken at 896. lots more there for others to have. notice the new butterfly in this picture sometimes they take off as if they were eagles.
Peat. Just had a vision while reading your post :D:D
I think I should tone down my optimism a tad...you agree?;)
http://i458.photobucket.com/albums/q...eenShot012.jpg
...SPX 500 continued to bounce after staying ahead of *879 last week
- *916 congestion/*925/*930 double top overhead
Trading Strategy: sideline (safest); hedge: short with upside stop
Kind Regards
haha thats awesome Hoop.
I'm certainly feeling optimistic now, tho not that the market will go in one direction or another, more that my harmonic patterns get it right sometimes.
...most likely, the bulls need some more visionary aid to see the index past *916/*925/*930 but in the meantime, *875 seems to go for a walk soon
Trading Strategy: sideline (safest), hedge: short with upside stops and naturally, sell stops somewhere in the desert below *875
FRBSF Economic Letter
2009-16; May 15, 2009
U.S. Household Deleveraging and Future Consumption Growth
http://www.frbsf.org/publications/ec...el2009-16.html
Kind Regards
the last 3/4 hours action sofar looks like a bear flag. after it was oversold. the xlf has tested 11.64 again today. looking to add to shorts at 895 s&p
...starting from May 8th High SPX 500 *930 > declining tops *925*/*914
-*914 > Key Level to any further upside potential; most likely market will fail beneath *814 and consequently drive SPX 500 out of current trading range > if *875 test fails
Trading Strategy: sideline (safest), hedge: short with upside stops and naturally, sell stops somewhere in the desert below *875
Kind Regards
...during the last 5 minutes of trading the SPX 500/the Dow/the Russell 2000 all pushed through their respective Wednesday's (27th) intraday High;
...before getting carried away with bullish sentiment, today's charge needs to be confirmed with a close above SPX 500 *925 (May 20th High), further indicating the continuation of the bear rally towards the SPX 500 target *950/*1000 (+);
Trading Strategy: sideline (safest) till confirmation; hedge: stopped out and now neutral with very tight down side stops to protect equity exposure (I have my reservations about this move)
Transparency????
As for today's market close, with a literally parabolic jump in the last minute of trading, if anyone still thinks this market trades based on anything resembling normal behavior (unless someone had a very Jerome Kerviel-esque fat delta hedging finger or one/two moderate/large quants who had a huge index hedge imploded), I have some BBB+ rated CMBS to sell to you at par. One culprit could be hiding in the huge drop of agency trading, which this week dropped to a several month low of 1.875 billion shares.
(see attachment 1)
So as essentially no institutional or retail clients are trading any more, it is just a few desperate computers trying to front run each other. And, of course, for the biggest beneficiary of this PT principal bonanza, look no further than the chart below.
(see attachment 2)
Going back to today's ridiculous close, the chart below shows it all: the complete tape painting volume spike at the very end of the day speaks for itself. And as computers now simply issue forced stock recall orders to each other, painting the tape wet with manipulative intent and volume spikes into the last 20 minutes of trading every day, their human creators are left on the sidelines, trying to outshout each other as to the reason for why the market keeps rising while the economy keeps tumbling.
(see attachment 3)
Is there ever going to be any transparency in this market again?
Kind Regards
Further to Friday's Close:
Friday's close was "interesting", to put it mildly.
Here's a chart of Friday's price action in the /ES, the S&P 500 "Electronic" Futures:
(see attachment 4)
Notice the huge volume spike (the blue underlay) on the chart at the close.
There were 146,083 contracts traded in that one-minute period between 14:59 and 15:00 (Central); the next minute, when the real dislocation hit, traded 91,774 - after the cash market bell had rung.
The closing bell is usually busy. But this sort of volume is absolutely unheard of. To put it in perspective yesterday the same time recorded 26,540 contracts, and 36,642 the minute after.
Volume was light all day, as is somewhat common in the summer on a Friday. The close started its usual increase, and was up to 23,000 contracts at 14:57 with two minutes remaining.
Then all hell broke loose.
"Paper", or institutional representation, was stalking the close; the pit audio feed so stated. Directly in front of the bell 1,000 contracts were bought - as near as I could tell at the market.
Those are "Big" contracts, each being 5 of the /ES minis; this was, in effect, a 5,000 contract /ES market order.
The reaction was instantaneous. The offer side of the market collapsed and the /ES rocketed higher. In the pit, trades went off as high as 925, but on the E-Mini trades were recorded as high as 927.75. As quickly as it got there, it collapsed back to 922 - a nearly six-handle (3/4 of one percent) straight-up and down spike.
Now here's the problem:
For me to believe this was "organic", that is, this was an un-forced order, I have to believe that someone wanted to go home net long the equivalent of 5,000 /ES contracts into the weekend at a severely disadvantaged price. The market had been calm all day; if you wanted to buy 1,000 spoos (equivalent to 5,000 E-Minis) there was plenty of opportunity to do so all day long. This sort of market order was guaranteed to dislocate the market - so the buyer had to simply not give a damn what sort of price they got.
How bad of a fill was this? To put this in perspective each /ES point is worth $50 per contract.
Each single point that was disadvantaged to the buyer by this execution cost him a cool quarter-million bucks, and on average, the "disadvantage" was likely around five full handles, meaning that the buyer of these contracts, if this was an "organic" order, willingly ate $1.25 million dollars.
I don't believe for one second that is what happened.
There are only two possibilities that I can come up with, and both demand answers:
"Someone" was forcibly liquidated out of a short position - a fairly big one. 1,000 S&P "big" contracts has a maintenance margin requirement of $22,500,000 - that's not a small position, and each point, as noted, has a $250,000 move associated with it. Who was it and why?
"Someone" who didn't give a damn if they lost a sizable amount of money intentionally wanted to shove the cash market up through the 200DMA, a critical technical level. They were 1 minute late; they succeeded in doing so in the futures, but not the cash!
#2 makes for great conspiracy theories, but my money is on scenario #1 - someone got forcibly liquidated into the close, perhaps a big customer, perhaps a hedge fund, but someone.
Whoever it was the coupling between the pit and the Globex futures guaranteed the result. There are computers and traders looking for differences between the pit and E-minis every day who try to pick up those nickels in front of a steamroller. When the offer side collapsed the computers took over and stops got run all the way up to 927.75 before quickly collapsing back down to 922.
Here's the cash chart, as of the close this afternoon:
(see attachment 5)
That's a very pretty potential double-top in the oval, and it coincides with the 200MA.
This is not to say that this level will necessarily hold. We are, in fact, only at the 38.2% retrace from the decline that initiated last fall! It would not be unusual for a bear market rally to go as far as the 61.8% retrace before its over, which is up around 1060ish, or the 50% retrace around 990.
What does this all mean? A few things:
The stops up there are gone. They were potential rocket fuel for next week and the propellant to take us to - and potentially through - the 200DMA on the cash.
A bunch of someones had a lot of contracts that were short taken out on them. Those nearly 250,000 E-mini contracts did change hands, and odds are a very large percentage of them constituted stop-loss orders on contracts sold short from when we were up toward 933 a few weeks ago. Those traders are going to be quite pissed off, but that's the risk of the game.
Next week is very likely to be extraordinarily violent, especially Monday. /ZN (10 year Treasury futures) has seen an insane drop in open interest over the last few weeks. This little game undoubtedly severely damaged open interest in the E-Mini /ES contract.
Thin markets are dangerous markets. While the E-Mini still is very liquid, the removal of these stops from the order book leaves the door open for both little resistance if the market decides to move higher early next week, and also provides the potential for irritated shorts to re-establish their positions short, driving the market lower. Those who wound up long during that little ramp job are likely to be rather nervous as well.
For my part I shorted that spike. Not large, and I am fully prepared to hedge it Sunday evening if necessary or just take it down, as there is every possibility, this close to the 200MA, that we will at least hit it on the cash, and blowing through it on volume and continuing higher cannot be ruled out.
I will note, however, that the last time we saw this sort of dislocation activity start up into the close it it too began with these sorts of "rocket shot" moves higher - and once the shorts were all blown out by having their stops run, the market essentially pancaked.
Look sharp - the sharks are in the water and you taste good.
Disclosure: Mildly short (~5% position) the broad market.
(looks like I am a bit more scottish than this guy but as I said, the downside stops ARE PRETTY TIGHT and thinking about it could ride his short position all the way to Athens....)
Kind Regards
...no point speculating; sure is that according to some analyst opinion, since the Dow is price weighted and GM's price is under 1 US$, the removal of GM would not have a big impact...but whatever the replacement could be, would probably make for a more volatile market.
Kind Regards
The DOW replacement when GM exits is going to be a talking point. It seems a tech company may get the nod. Apple? Google ?
Many have observed that there are no insurance companies now and thin in financials so the DOW seems unbalanced at this moment. Many also point out by saying "who cares" as the DOW is becoming irrelevant as an index.
The current 30 companies that make up the DOW are
Company Symbol /Quote
- Alcoa AA
- American Express AXP
- AT&TT
- Boeing BA
- Caterpillar CAT
- Coca-Cola KO
- Citigroup C
- Disney DIS
- DuPont DD
- Eastman Kodak EK
- Exxon MobilX OM
- General Electric GE
- General Motors GM
- Hewlett-Packard HWP
- Home Depot HD
- Honeywell HON
- IBM IBM
- Intel INTC
- International Paper IP
- Johnson & Johnson JNJ
- McDonald's MCD
- Merck MRK
- Microsoft MSFT
- 3M MMM
- JP Morgan JPM
- Philip Morris MO
- Proctor & Gamble PG
- SBC Communications SBC
- United Tech UTX
- Wal-Mart WMT
Just general information
With this last week I have heard of commentators within various media mentioning uncertainity in the markets and increasing volatility within the markets. I thought I better check on the VIX a good measuring indicator for volatility. I was surprised to find that it is continuing to fall and is still in its downward trend channel.
..just goes to show don't take the media as gospel.. pays to do your own homework. (the vertical line is my reference when I last check VIX)
http://i458.photobucket.com/albums/q...to_08jul09.png
...they were most likely referring to a Sell Signal the VIX flashed twice on May 7th and 20th which states:
the VIX indicates bearish sentiment (sell signal) if:
-VIX closes below 2 std-deviations from its 20-day period moving average and then closes back within it
...anyway, the market was short up to 5 minutes trading last Friday and there is no doubt in my mind that it has been rigged up, like this 'Green Shoot Bear Rally' has been tampered with from the start...
...and as far as GM concerned, it's history but it's death will create severe ripple effects throughout the markets for a long time as one supplier after the other will bite the dust...
!!!!REMAIN ACUTELY AWARE OF THE BEAR!!!!
_no guarantees and strategies are just ideas_
Kind Regards