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So...who's zooming who? Besides us, is there anyone else trading the indexes (lol)? From today's ZeroHedge. Two
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As the market shoots up once more, there is absolutely no volume breadth participation aside from the traditional program traders who now enjoy complete domination over daily market moves. The SPY intraday volume is plunging relative to average, and at last check 62 million shares were traded compared to a 105 million average by this point in the day: a 40% drop! This should account for all those on the "sidelines" who have taken the Wall Street equivalent of the Main Street revolt to heart, and refuse to participate in what everyone realizes is a market that has no connection to any underlying fundamental reality. We wish the computers all the best as they gun the S&P to 1,600 on 20% real unemployment, $9 trillion in budget deficits, a CRE collapse, waning stimulus effects, and a fast approaching 10% savings rate.
Could be they'll push the Qs as high as possible now (41.35?) to blunt the drop that comes this afternoon? But even if the Qs do drop this afternoon, I still see upside ahead this week. Friday and 9/11 may see the top? Two
What do you think, Gleno? Are the Qs going to top out around 41.35, as I suggested yesterday? Looks real toppy right here, doesn't it? Two
Good analogy, 2bit. The difference between Da Boyz and Criss Angel, however, is that Da Boyz are cheats, liars and bad people. Mr. Angel is only a performer whose goal is to entertain and make people happy. Da Boyz try to crush everyone and steal their money. They are the "dark side" of our world. Two
Jam job. Two
Gleno, my 5-min charts suggest the Qs may not have reached their zenith during this burn. They may drop to 40.31 this week, but I wouldn't be surprised if they eventually exceed the high of 8/28 and end up around 41.35 by Friday. JMHO. Two
Thanks, that's what I thought. Two
Hey, Foot. FYI...ZeroHedge presented powerful info re. the housing industry. The author asks why there's no "outrage"? Perhaps very few have these facts, even in the real estate industry? Or perhaps everyone has decided to ignore the criminal acts that the FHA is engaged in? Two
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In case you are wondering how it is that the housing market has suddenly sprung back, it’s because the era of free money is back, courtesy of the benevolent U.S. government. The FHA’s share of the mortgage market has ballooned from a residual 3.0% in 2006 to 23.0% currently as the government moves in to replace the private subprime lending industry. So now we are back to the thought process that insuring mortgages with a 3.5% down payment is a good thing for the economy — little surprise that the FHA delinquency rate has soared to nearly 8.0% from 5.4% a year ago, and the taxpayer is on the hook. How is it that there is no public outrage for a government policy of giving another shot of scotch to the drunken sailor is totally beyond our comprehension.
Hi, POKERSAM. Your "wave thoughts" would be appreciated. My former guru, McHugh, issued the email below and he seems to be suggesting that (B) up will soon come to an end (with "catastrophic C" down to follow). Do you agree with his analysis. As always, thanks. Two
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Stocks are up mid-day Tuesday, September 8th. It looks to us as if the final wave C-up for this Bear Market rally that started back in March 2009 is forming a Rising Bearish Wedge. It is early in the pattern to make a definitive identification, however the pattern looks like it formed three waves for the first leg up, which ended August 27th. If a Rising Wedge is occurring, each of the five component waves should be three wave moves. So far we can label three waves for the first two component waves. If this is in fact happening, that is a great gift from the market, as Rising Wedges are termination patters, and highly reliable, so this would be great guidance for when (B) up ends and catastrophic (C ) down starts. We will monitor this pattern closely as it further develops.
There's fear, all right, but my guess is that Da Bozos are going to keep the indexes levitating into Friday, which is 9/11. It's their patriotic duty, right (lol)? Two
Kneale vs. Denninger: 5 minutes of amusement for this Labor Day. Two
http://market-ticker.denninger.net/
That's the feeling of most U.S. citizens, according to this guy's study. Most folks feel that when Congress is on vacation, it can't do much harm to the nation (lol). Their vacation ends today and theoretically they'll be back in D.C. next Tuesday. Two
They'll let it down...and probably do so next week. Right before Congress went on recess in mid August, a fund manager was interviewed by Bloomberg because his fund only traded during the month-long Congressional vacation periods. He presented evidence dating back to around 1913, if I recall, that proved the market almost always rallied during Congressional recesses. Well, guess what? He's been right since August 17. Now, here's the "rest of the story," as Paul Harvey used to say. The market typically declines after the Congressional recess. That's why he takes all his customers' money off the table at that point. So, I ask you, when does Congress come back to work? Two
OT: I really enjoy it when Denninger takes on CNBS and the likes of shills such as Dennis Kneale. Two
http://www.zerohedge.com/article/denninger-vs-dennisdenninger-%E2%80%98nuff-said
Probably. Denninger pointed out today that of the 1 billion shares traded this a.m., more than 25 percent was comprised of C, FNM and BAC. He described those companies as follows: "Three zombies, one of which has no equity value and two more that exist only because the government has guaranteed, collectively, half a trillion dollars of what may be worthless assets." Makes you wonder, doesn't it? Two
Wake up, Gleno! My charts think the SPX is going up before it grinds down below 990. Looks like they want to take up the indexes into Labor Day and possibly into 9/11. Then there's that Bradley turn date around 9/14. Two
I agree, Lindy. Charts suggest the INDU might have put in a s-t bottom around 10:20 this a.m. Two
ZZZzzzzz....What? That's enough noise out of you, boutonj68! I was having such a nice nap (lol). Two
Anyone have any thoughts re. the FOMO meeting at 2? Two
I don't think it's "mindless speculation" at all, RCKS. Rather, it makes sense. What I'm seeing on the 5-min and 60-min INDU charts, however, are patterns that are very similar to the beginning of the rally from August 17 (through August 28). It could be a fakeout or it will fizzle, but the signals are strikingly similar. Two
RCKS, I think today's market performance is pivotal to the direction we inevitably take. I have buy signals. But these could always be negated, of course. Two
Gleno, I'm not so sure Da Boyz are ready to let the pig drop, however. Plenty of buy signals this a.m. Plus, we've got Labor Day and 9/11 coming up. I think they're going to take up prices one more time into the Bradley turn date of 9/14. JMHO. Two
You could be right. But I'm very cautious at this stage. A guy named Biderman explains on ZeroHedge that insiders are selling at a ratio of 30 to 1. Two
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TrimTabs' CEO Charles Biderman Discusses Massive Insider Selling
Submitted by Tyler Durden on 08/31/2009 16:25 -0500
CEO Charles Biderman Insider Selling Money TrimTabs
"Insider selling is 30x insider buying, while corporate stock buybacks are non-existent. Companies are saying they don't want to touch their own stocks."
"I don't know where the money is coming from to keep the markets from not plunging."
One can offer some suggestions.
Good call, you. Two
Looks like we bounce, Gleno, at least in the morning. Two
Denninger seems to think we're heading for an all-out market crash. Two
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You have to wonder when you see statistics like this (through 9:30 this morning):
Remove SPY, ETFC and LEHMQ (none of which trade on the NYSE) from the list and you get 606 million shares.
How many shares have traded in total with one hour in?
1.491 billion.
Forty percent of the volume is comprised of four used dogfood stocks, just as we've seen for the last couple of weeks - all people passing shares back and forth among each other, many of it being "computer HFT games."
The other used dog-food stocks (LEHMQ and ETFC) are really no better; they just don't trade on the NYSE. Lehman is particularly ridiculous as that's a formally-bankrupt company!
Fannie and Freddie are two of the most outrageous abuses I've seen in a long time, second only to AIG. All three of these should be delisted as their equity value is quite literally bupkis.
This just goes to illustrate - the market is currently being levitated on literal trash. Again today we see the Casino trying to suck in people; I got emails from two more associates over the weekend telling me that their "advisors" are telling them "you have too much cash allocated; now is the time to buy."
Now is the time to buy, after a 50% move?! Where the hell were these so-called "advisors" at SPX 666!
Nobody - and I do mean nobody - is talking about what this sort of volume pattern means. Well, I will: this is the sort of pattern that precedes an all-on equity market collapse. It strongly implies that the only volume support that the market has is from "hot money" speculators. Lest you think this is sustainable let me point out that just a few weeks ago the very same so-called "commentators" said the same thing about China's market. Here's what happened:
The white box down below is the target on the break downward out of that flag last night - the top of the box is the critical "must hold" level from the first retrace off the bottom and the bottom of the box being the the start of the entire move. If they're lucky the market holds around the 250-275 level, but I wouldn't bet on it.
That's nasty - The Shanghai market has already lost roughly 25% from its recent peak, and it took just three weeks to lose what required roughly three months to put on.
How do you like those odds folks? Pay close attention to the lessons from the East, least you get to learn them the hard way right here.
A 25% loss from the recent highs on the SPX places the S&P 500 around 775.
I smell a repeat of 2001/2002, when the very same "analysts" said the bear market was over and everyone jumped back into the pool going into the end of 2001, only to get destroyed in the collapse that followed and took out the 2001 low.
Heh, I might be wrong on this, but those who "believed" in the Shanghai market are missing 1/4 of their money - so far.
Just wait, you may have to raise your grandkids, too. Two
Unless, of course, the note was from his wife and, loosely translated, meant he was supposed to go to the market and shop at 10:28 this morning? Dan, you could be in trouble? Two
LOL...I'd settle for a download of their proprietary trading software. Two
GS took your tax dollars (and mine) and made profits that enabled the company to set aside $11.4 billion so far this year to pay bonuses. That's an average of $770,000 for each of its nearly 30,000 employees. Two
Re. Dell's annct. last night, I wondered about insider trading? Denninger confirmed my suspicions this morning. Two
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Dell's release slipped out about three minutes before the market closed Thursday, giving the company's shares a boost of 98 cents, or 6.7%, to end at $15.65. The stock topped $16 ahead of Friday's opening bell.
Really? You sure about that Marketwatch?
This is about as blatant as it gets - a huge ramp, on huge volume.
"Someone" (or a bunch of someones) had that report 17 minutes before the bell, and if you were one of the "chosen few" you had a "high frequency" 14 minute window to loot the joint - again.
This sort of scam is so "in your face" that it leaves open not only the question of whether there are any cops (answer: No) but also whether one should have any confidence in our markets as a fair place for people to invest (again: No.)
In a nation honoring the rule of law this sort of trading pattern would result in an immediate investigation and a literal blizzard of subpoenas within minutes.
But we don't live in that sort of nation, do we?
Of course, no one is talking about all the families that have now added to their debt? And how 'bout the dealers who still haven't been reimbursed by the government? And what happens to car sales now that the program is over? And what will the dealers do who relied in the past on used car sales now that all the "clunkers" have been destroyed? Lots of other questions could be asked. Two
By the way, the ZeroHedge folks made it very easy to understand flash trading with this analogy. Two
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"I’ll start with the second article. It likens Flash Trading to offering to sell your house to your neighbor before you list it. That analogy is wrong. The correct real estate analogy would be that you are about to close on selling your house to Joey for $500,000, and you FLASH your neighbor (not Joey) about your impending deal with Joey, and then your neighbor can step in and buy your house instead of Joey for $500,001, or perhaps even drive to the closing before you get there, and offer Joey his house instead of yours for $499,999. Get it now guys?"
Fox, a friend of mine who's an excellent trader had a "remedy" for the problem you describe. Do you agree with him? Two
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There is a simple way to get around the "change in Time latency" of slow vs fast computers. Make any offer to buy/sell have to sit on the mkts for a minimum time period of 5 seconds. Problem solved and no amount of on site computer situating is going to be of help a cheater. This would solve all problems.
Fox, now you know why I don't trade options (lol). Two
Hey, Fox, here's the competition we as daytraders face every day (according To ZeroHedge's Ty Durdin). Durdin examines a Wall Street HFT company called Getco. Two
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The Wall Street Journal is finally heatmapping on exposing the key players of the day. Scott, a tip from us - next up: RenTec's Medallion... You will find much more juiciness to sink your teeth into. But for today Getco serves just fine.
From the WSJ:
Since its founding a decade ago, the firm has risen to become one of the five biggest traders measured by volume in stocks and other instruments that trade electronically on exchanges, such as Treasury bonds and currency futures, according to firm executives, who spoke with the Journal this week, and other people in the industry.
"They are probably the biggest market maker in the U.S. stock market," said Justin Schack, a vice president at Rosenblatt Securities Inc. who closely tracks high-frequency trading. A market maker is a firm that always stands ready to buy or sell a stock.
High-frequency trading, in which traders use powerful computers and algorithms to trade at lightning-fast speeds, has grabbed attention after it produced stellar results during the financial crisis and amid estimates that it now accounts for more than half of U.S. daily stock trading.
Critics say high-frequency traders can trade ahead of less fleet-footed investors and squeeze pennies out of their pockets. Defenders say high-frequency shops help markets operate more efficiently by constantly stepping in to trade securities when investors wish to buy and sell. That, in turn, makes trading cheaper for individual investors.
Lest you thought Getco et al would go down without a fight:
"Electronic markets have been the best-performing parts of the financial markets" in the past few years, said Dan Tierney, a co-founder of the company with Stephen Schuler, in a rare interview. By contrast, many securities and derivatives traded over the counter, such as credit default swaps, malfunctioned amid the credit crisis, with devastating consequences.
Curious - it seems the heads of these firms are finally crawling out from behind the shadows and vigorously defending the noble services they provide as undesignated market makers who have the option of disappearing on a moments notice and collapsing the liquidity of the entire market. As for devastating consequences, wait to see what happens if all the stock market liquidity were to simply go away one day. Yet again, one wonders why Messrs. Schuler and Tierny are suddenly feeling threatened.
And yes, here comes the liquidity defense:
One day last October, Getco juggled about two billion shares, representing more than 10% of the volume in U.S. equities, according to a person familiar with the firm.
Without high-frequency traders, Mr. Tierney says, the market's losses could have been much steeper. The Dow Jones Industrial Average plunged 14.1% that month.
Now that Getco is favoring the PR approach, it can disclose how much of the churn in AIG, BAC, FNM and FRE it has personally been responsible for.
And, yes, "providing" liquidity is profitable:
All this has been profitable for Getco, which earned about $400 million in 2008, trading mostly with its own money, people familiar with its finances say. Getco, which stands for Global Electronic Trading Co., declines to comment on its profit.
And according to a tip, GETCO made $800 million last year! On 250 employees: that's well over $3 million a pop, a number most investment banks would kill for. However, don't confuse Getco with an actual market beneficial, long-term investors:
Unlike traditional Wall Street firms, the company holds relatively few securities by the time markets close for the day. Nor does it use much leverage, or borrowed money, to amplify the effects of its trades.
Since it constantly buys and sells, it can move in and out of hundreds of millions of dollars' worth of securities every day with a relatively small amount of capital. It favors shares that are the most heavily traded.
Truly Getco is a real humanist for allowing the fab five fins to amount to 30% of the NYSE volume. The fringe benefits to the markets are incalculable.
Getco depends on the success of its proprietary complex algorithms to help it make money on the transactions more often than not. It also can pick up tiny rebates that some exchanges offer to firms willing to take the other side of trading orders. The company focuses on hiring top computer programmers and technicians, as well as traders.
Hey Sergey, if the Teza gig falls through, you know where to send your resume (but you already knew that).
And going back to our original point, Scott - have a call into East Setauket. You will be amazed at what you may find.
OT: Surprise, surprise (lol)! Did the SEC know what Madoff was doing and covered it up? If you have a few minutes, you may want to catch up with this report from Jessel's Cafe Americain. Two
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This is only the tip of the iceberg, but even it may never be seen.
We ask now why the economists and regulators and media said little or nothing while the frauds and bubbles were developing, then.
But what are they saying now, about the new frauds, and injustices, and the blatant manipulation of the markets wherein some traders turn in financial results that are improbable to produce without inside information and breaking the rules?
A few heroes speak out, but most of the intellectual leadership cower in the shadows, asking 'Where is the outrage?' And the media baits the crowd with this or that distraction, and inflames them to think whichever way it pleases.
Here is an audio interview with Harry Markopolos in which he gives his views on the Federal Reserve as a regulator, financial reform, and the 'recovery.' Harry Markopolos Interview with King World News
Let us start here, and now, to demand the change required. Let us begin by auditing the Fed, and refusing to tolerate the granting of more regulatory power to an institution spawned in a deception in 1913, and at the heart of so many of our financial crises ever since. The Creature from Jekyll Island: A Second Look - G. Edward Griffin (2007)
As of yet, nothing has changed. The silence is deafening.
AFP Interviews Harry Markopolos
...In May of 2000, he submitted an 8-page report to the Boston Regional Office of the Securities Exchange Commission (SEC) listing red flags and mathematical proof of a major fraud but got no reply. He re-submitted his evidence to the Boston and other SEC offices in 2001, 2005, 2007 and 2008, to no avail. By this time, Markopolos was realizing that Madoff had been operating with protection from the inside.
In late 2008, when the stock market crumbled and investors rushed in to redeem their investments, Madoff ran out of cash, turned himself in to authorities, and pleaded guilty in federal court last March 12th.
Markopolos said that all the members of his team feared for their lives during the long investigation and he for more reason than any of the others because of his visibility. He was the one who was submitting all the complaints each year, and he knew that any leak from the SEC could make him a marked man.
He explained that the “offshore feeder funds” were only one step removed from organized crime. “If organized crime knew that Madoff was stealing their money, he would have been killed. Therefore, if Madoff had ever found out that we had a team tracking him through Europe and North America and that he risked getting exposed, it was a good bet that he would have had several billion reasons to want us silenced first. To compartmentalize the damage, I was the only one who went to the SEC.”
No one there knew Markopolos had an assisting team in the field. But Markopolos has proof that the SEC was culpable, too, and says publicly that he has tremendous anger at the agency and sadness for the victims. He says that there were SEC lawyers who were “in bed with Madoff ” and helped destroy lives.
“Madoff paid people to look the other way,” says Markopolos and reminds us that there is a federal report scheduled to come out by the end of the year. He emphasizes that unless there is a cover-up, “the SEC will cease to exist...”
Posted by Jesse at 11:01 PM
Very good, gloe. Here's one more: "GS proprietary HFT software=market rally." Two
LOL, Fox. I've never helped an Indian woman out of her sari. At least, not that I will admit...but it sounds interesting. Two
Fox, I'm cautious because of the TOM effect. If prices drop tomorrow, my guess is that buying will quickly take prices up again. JMHO. Two