by Phil Davis - September 8th, 2014 7:41 am
Sure you do, this was Friday's intra-day chart of SPY, the ETF that tracks the performance of the S&P 500. It's pretty similar to what happened every day last week, with a high-volume (relatively) sell-off followed by a recovery on almost no volume into the close, giving us the impression that the markets are flat.
Only Friday was a bit different. On Friday, the market manipulators were so desperate to close the week on a high note and so greedy, that they also got sloppy and now we have some very clear evidence of what complete and utter BULLSHIT this market is:
What do we see here? Despite a 0.45% rise in the S&P and a 0.39% rise in the NYSE, 0.4% in the Dow, 0.45% in the Nasdaq and 0.25% rise in the Russell, the FACT is that there were FAR MORE shares DECLINING than there were advancing. In fact, on the NYSE MKT (what used to be called the AMEX), declining volume outpaced advancing volume by 115%. 115%! Yet we get a 0.4% RISE in the index?
On the NYSE itself, 2,079 stocks declined while only 1,057 (33%) of the stocks advanced and there was 56% more volume to the declining shares than the advancing shares yet, MIRACULOUSLY, 160 NYSE stocks made new 52-week (and, often, all-time) highs while just 30 made 52-week lows. That's 84% positive! Isn't that amazing? Isn't that UNBELIEVABLE???
It is unbelievable, as in – something that should not be believed by intelligent people. When you see a magician on stage sawing a woman in half or levitating – you might be amazed at what a good trick it is but you don't start believing in magic, do you? What if that magician asks you to bet your retirement on the fact that he is really levitating people or that his assistant can medically be cut into pieces and reassembled?
by Phil Davis - July 7th, 2014 8:23 am
Operation "Penny Pincher" nabbed 22 penny stock pumpers.
As I often point out to our Members, a stock doesn't have to be a penny to be a penny stock – any stock with a market cap under $100M is generally what we're talking about – regardless of the share price.
That's because the stock can be easily influenced by exactly the kind of action the FBI proved is RAMPANT in this industry – a single trader can, for a fee, move money into the stock and send the prices skyrocketing – then press releases are put out to whip retail investors into a frenzy and they follow with their money and, usually, get burned.
Of course, the same thing happens with mid-cap stocks as well and even large-caps – it's just that the people manipulating those stocks are generally better at covering their tracks! 22 is the number of people the FBI caught in the short period of time an operation like this can run before word gets out that their cover people are conducting a sting. Imagine how many other must be out there!
Obviously the markets are manipulated. We know CEOs and their Boards worry about the stock price – the minute they begin to worry about the stock price, manipulation is sure to follow. That's the way the system is designed. We have a Fed who worries about the price of the market and they manipulate it too! It's our job simply to be aware of the manipulation and take it into account in our trading and investing decisions.
Back on June 12th, I began a series of articles pointing out that oil and gasoline prices were being manipulated into the holiday weekend. Oil shot up to $107.68 that day and stayed between $105 and $107.50 through June but the EXTREME lack of actual demand we warned you about. This morning, oil is below $104 and up $3,500 per contract from a short at $107.50 – a trade idea we highlighted for our readers Friday morning, June 13th.
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by Phil Davis - July 3rd, 2014 7:36 am
Happy Birthday America!
The markets are closed tomorrow and today is a half day but the trend is certainly our friend on the S&P as we haven't been below the 200 day moving average since December of 2011 (except a couple of very brief dips). Though the average volume is about 30% lower than it was back then – it's still an impressive feat.
Of course, if 10% of the market was manipulated before and the manipulators haven't left (they certainly haven't) – even if the level of manipulation remained the same, 30% of the 90% that wasn't manipulated (retail investors) did leave (possibly BECAUSE of the manipulation) and that means now manipulators control 10% of the remaining 70%, a 42% increase in manipulation! Of course we know it's much worse than that because now the Central Banksters perform their own brand of market manipulation. As noted by Salient Partners in a great article about PBOC Manipulation:
The explicit purpose of recent monetary policy is: to paper over anemic real economic growth with financial asset inflation. It’s a brilliant political solution to the political problem of low growth in the West, because our political stability does not depend on robust real economic growth. So long as we avoid outright negative growth (and even that’s okay so long as it can be explained away by “the weather” or some such rationale) and prop up the financial asset values that in turn support a levered system, we can very slowly grow or inflate our way out of debt. Or not. The debt can hang out there … forever, essentially … so long as there’s no exogenous shock. A low-growth zombie financial system where credit is treated as a government utility is a perfectly stable outcome in the West.
So China has indeed learned the most valuable lesson of Capitalism – that money is a meaningless contstruct that can be freely manipulated to fit whatever narrative the Government wishes to spin and that debt is not to be feared, but embraced, especially by our Corporate Masters – because our National Debt becomes their Private Profits!
by Phil Davis - June 27th, 2014 8:14 am
I forgot to talk about something important yesterday.
Turkey was caught FAKING their trade data, with Prime Minister Erdogan, working with Economic Minister Caglayan LAST YEAR to manipulate their $800Bn economy by sending gold overseas to boost their export numbers. How a team that included Turkey’s economy minister sought to manage the current account deficit, as the gap is called, by juicing exports to Iran is laid out in a 300-page document prepared by Turkish investigators in 2013. Caglayan and his collaborators also came away with tens of millions of dollars in bribes, according to the document, which has been cited in parliament by opposition lawmakers.
That's how things are being done in the World's 18th-largest economy and, notice CHINA (3rd) is one of the countries participating in this scam, as is Iran (21st) and Dubai in the UAE (30th). We already know China is involved in all sorts of economic manipulation, including building entire empty cities just to boost their GDP numbers. China, in fact, is in the midst of another set of scandals, with tens of Billions (GS estimates $160Bn) in bank loans backed by silver and copper collarteral that does not, in fact, exist (maybe they "got it" from Turkey?).
by Phil Davis - June 18th, 2014 8:36 am
It's a Fed day today!
That, of course, means MORE FREE MONEY and the markets are giddy with anticipation ahead of the meeting – especially since we had more poor housing data yesterday and that's exactly the kind of bad news that is good news as it keeps the Fed in easy-money mode a little longer.
As you may have guessed, we shorted oil this morning. The July contract (/CLN4) expires on Friday and, as you can see from the chart, we continue to find great profits in the sell-off that we predicted would come last week. We went over some Futures Trading Tips in yesterday's live Webinar as well as the new, bullish positions we've added to our Long-Term Portfolio. Much as we rail against what we firmly believe will ultimately be a disastrous policy – you simply can't fight the Fed and we're not trying to – it's much more profitable to go with the flow.
Going with the flow is exactly what we're doing with our oil trades as they STILL have 103M barrels worth of FAKE orders open for July delivery (actually, about 20M will actually be delivered so "only" 80M are fake at the moment) and that is down from the 172M FAKE orders that were open on Friday morning (see chart on Friday's post).
|Current Session||Prior Day||Opt's|
by Phil Davis - June 13th, 2014 8:26 am
In just 5 minutes we made our first $250 (per contract) of the morning and then we got a chance to re-load at $107.50 at 3:50 where we shorted it again (also noted in our Live Member Chat Room) and second time was already a charm as we got a much nicer run – this time all the way down to $106.75 for a $750 PER CONTRACT gain.
We're still shorting oil as it retests the $107 line and, if you read yesterday's post, you know why we are shorting oil already but this morning, if you want the late, authoritive word on the subject, the IEA just (7:58 EST) released a statement:
by Phil Davis - May 20th, 2014 8:11 am
Is this a joke?
As we thought, yesterday's volume was very low – it was actually the 2nd lowest day of the year, that didn't stop the Nikkei and the Hang Seng from following us up half a point but Shanghai was flat at 2,008, dropping 10 points from its pumped up open and I'm sorry but you are NUTS to be too bullish in this market when that index is in danger of failing 2,000.
I don't mean not bullish at all – our LTP is still 100% bullish but it's hedged by the STP, which is mostly bearish. Just – BE CAREFUL!!!
Did you catch that news item above? "Shinzo Abe turned to Nobel laureate Robert Shiller to try to
restore a vital ingredient of his economic revolution: optimism." That's the World we're living in now – Central Bankers aren't even ashamed to admit that they manipulate the news and take actions aimed at making you THINK the economy is recovering.
That's based on the old "truism" that, if people are optimistic, the economy will improve but it's FLAWED because consumers no longer have any discretionary income to spend and they don't have any savings and small businesses, who still employ 80% of the workers, don't have any money to spend either.
They have shifted the bulk of the discretionary GDP to the top 0.01% who don't spend it at all but use it to consolidate their empires. All these old economic rules don't apply to an oligarchy – every act of stimulus only serves to make the rich richer and push the rest of the country further into debt. Sure, the rich are in debt too but a guy with $1Bn owes the same $164,000 per family as the guy with $100,000 does.
by ilene - November 9th, 2010 4:56 pm
Courtesy of The Pragmatic Capitalist
Some people want you to believe that the Fed just injected the economy and stock market full of
Before we begin, it’s important that investors understand exactly what “
This is a crucial point that I think a lot of us are having trouble wrapping our heads around. In school we are taught that “cash” is its own unique asset class. But that’s not really true. “Cash” as it sits in your bank account is really just a very very liquid government liability. What is the difference between your checking and savings account? Do you classify them both as “cash”? Do you consider your savings accounts a slightly less liquid interest bearing form of the same thing a checking account is?
What is a treasury note account? It is a savings account with the government. So now you have to ask yourself why you think cash is so much different than a treasury note? What is the difference between your ETrade cash earning 0.1% and that t note earning 0.2%? NOTHING except the interest rate and the duration. You can’t use your 13 week bill to pay your taxes tomorrow, but that doesn’t mean it isn’t a slightly less liquid form of the exact same thing that we all refer to as “cash”. They are both govt liabilities and assets of yours.…
by ilene - August 30th, 2010 5:40 pm
Courtesy of Tyler Durden of Zero Hedge
Anywhere one turns these days, bashing HFT is the new market normal. Having written 150 articles on the topic, beginning in April 2009, we are happy to have brought the world’s attention to this most dangerous of market aberrations. Yet until the SEC finally bans the practices of micro churning, quote stuffing, positive feedback loop chasing, flash trading, subpennying, DMA accessing, and all other aspects conceived merely to provide some market participants with an unfair advantage over everyone else, the fight against HFT must continue.
Which is why we draw your attention to two items: the first is a paper by Bluemont Capital "The Marginalizing of the Individual Investor" in which the authors question if HFT has distorted true market valuation (yes) and to what degree. Some relevant soundbites: "Unfortunately, high-frequency trader interaction with computerized algorithms of large-cap financial institutions is providing opportunities for high-speed, virtually undetectable market manipulation", "At a minimum, computerized high-frequency and algorithmic trading are undermining traditional value investing strategies. Short-term liquidity and data movements are distorting information on real business performance", "Essentially, high-frequency trading platforms function as positive feedback loops. Engineers treat positive feedback loops as inherently unstable, as each positive response generates stepped-up repetition of the same actions. Positive feedback loops result in an ever- expanding balloon, but like all balloons, the risk of bursting increases with the balloon’s size." It concludes that the "continuing advances in computerized trading pose challenges for regulators throughout the world—and leave individual investors marginalized… Regulators should not only seek to assure that markets are able to continue to function under stress, but they also need to devise remedial actions that protect individual investors who have fundamentally different objectives from the high-turnover objectives of high frequency traders and computerized algorithms."
The other notable item is the appearance of our friends at Nanex on ABC radio over in Australia, where firm founder Eric Hunsader discusses the previously highlighted concepts of latency arbitrage as a potential progenitor to the May 6 crash, as well as possible ways that the NBBO arbitrage could have provided for unfair and illegal mispricing opportunities for a select few.
Full August 29 interview with Eric Hunsader on Latency Arbitrage…
“It’s Not A Market, It’s An HFT ‘Crop Circle’ Crime Scene” – Further Evidence Of Quote Stuffing Manipulation By HFT
by ilene - July 31st, 2010 6:40 am
"It’s Not A Market, It’s An HFT ‘Crop Circle’ Crime Scene" – Further Evidence Of Quote Stuffing Manipulation By HFT
Courtesy of Tyler Durden
Recently we posted a required reading analysis by Nanex in which the market trading analytics firm presented irrefutable evidence of quote stuffing by HFT algorithms in tens of stocks, in which thousands of cancelled quotes would reappear each second with a definitive periodicity and regularity, around the time of the May 6 flash crash. Aside from the fact that it is illegal to indicate a quote without a trade intent, this form of quote stuffing is in fact manipulative when conducted by HFT repeaters in specific "shapes" as it actually moves the NBBO actively higher or lower, in cases pushing the bid/offer range up to 10% higher without even one trade ever having occurred, simply by masking a big block order which other algos interpret as bid interest and pull all offers progressively or step function higher (or vice versa, although we have rarely if ever seen the walking down of a stock over the past 18 months). It is as if the HFT lobby has been given the green light by the powers that be that it is safe to activate merely the bid-size quote stuffing algorithms, and not worry: the fact that the market is so one sided in its quote stuffing patterns is sufficient reason to worry of a concerted effort to push stocks higher, initiated from the very top, and effected by not only the Primary Dealer community but by the end-market "liquidity providers."
Today, courtesy of Nanex we demonstrate that this type of illegal stock manipulation continues rampant to this very day, and the SEC still fails acknowledge that it is precisely the HFT market participants that persist in destabilizing stock prices, which have given up responding to fundamentals and merely move up or down based on quote stuffing interventions by those who plead innocence and claim to only be providing liquidity. Well take a look at the millions in fake, and thus illegal, bids demonstrated below and tell us just how any of this manipulation is "providing liquidity" – the second the patterns break, the algos responsible for the churn pattern disappear, thus eliminating numerous levels of so called bid liquidity below the NBBO: break enough patterns and you have another flash crash…