The U.S. Securities and Exchange Commission’s plan to impose halts on some stocks that swing more than 10 percent starting today may be followed by more measures to slow down trading.
The circuit-breaker test, a response to the May 6 plunge that wiped out $862 million of share value in 20 minutes, will begin as a pilot covering five stocks before expanding next week. SEC Chairman Mary Schapiro said yesterday the agency is considering regulating the speed of stock orders as part of a broader effort to rein in electronic markets.
Call me crazy but aren’t we trying to seduce money into our exchanges and not scare the pants off of it? Note to the SEC: This sort of sh*t scares the money. You’ve been warned.
As I type this the S&P 500 is flat after running into the simple moving average just as the ISM Services report was released. All set up for a "rocket fuel run" based on a "surprise" beat. But alas, not to be.
However a flat session in the first hour is deceptive. We are actually down 0.5% in my book. Why? Because all of today’s gains came in the first minutes as premarket futures were marked up half a percent on essentially no reason.
So a pattern we’ve seen for much of the past year and a half
Premarket move: +0.5%.
Regular session: some sort of loss.
Today they happen to cancel each other out… leading to a flat day. That would be a negative day (at this moment of course) if not for premarket magic.
And this is why the premarket movement the past few years has become beyond annoying. And lest we pin the movement on ‘great news’ in premarket (a) the news was benign and (b) futures were up 0.4% before any news came out in the U.S. – and there was nothing of note overseas. It was just random magic.
There seems to be something unbalanced when a thin market, easily moved by a small slice of money (in the big scheme of things) can affect our day to day action so much.
Karl Denninger may be calculating the odds of this, coupled with the odds of Goldman Sachs’s results – I’m thinking something in line with the odds of the sudden birth of a new universe. (And if you’re trading the markets, it may feel like that.) – Ilene
JPMorgan Chase & Co.’s traders matched those at Goldman Sachs Group Inc. in making money every day of the first quarter, a first for both companies.
Daily trading revenue averaged $118 million on each of the 64 days in the first quarter, JPMorgan said in a regulatory filing yesterday with the U.S. Securities and Exchange Commission.
JPMorgan’s trading revenue from investment banking, its chief investment office and consumer lending division exceeded $90 million on 39 of those days, or more than half the time, according to the filing. Trading revenue surpassed $180 million on nine days, or 14 percent of the time, the second-largest U.S. bank said.
Believe me, having worked in the industry for 23 years, traders and firms do not make money each and every day. These results are a reflection of easy money provided by the Fed, lessened competition leading to a financial oligopoly in our country, and a variety of programs and mechanisms which are conduits funneling money into the banking system.
While the traders on Wall Street may believe it is their talents (and plenty are truly talented), the system is rigged and the game is fixed. Uncle Sam is the accomplice to the fix in hopes that revenues being generated currently on Wall Street can be utilized to write down the values of loans which are mismarked, have defaulted, or will default.
Is JP Morgan taken aback by these revenues? Publicly, I believe they are. How do we know? Listen to the statement put forth by the bank.
JPMorgan said it doesn’t expect the same trading revenue throughout the year. “The high level of trading and securities gains in the first
This is interesting. However, the conclusion that "individuals with antisocial personality disorder may not be unaware of… consequences… but instead that their intense reward-seeking motivation consumes their attention wholly until they have fulfilled their desire for reward" seems overstated, and only a small piece of the psychopath puzzle.
For a different perspective, that of a financial writer, and an even farther-fetched conclusion, read the second article below. The same data can be interpreted to show that a trader taking on excessive risk is "hopped up on dopamine" so they can’t see negative consequences, making them "kind of a psychopath." Take all this with a grain of salt haloperidol. - Ilene
An overactive dopamine reward system in the brain may help explain why psychopaths pursue rewards without regard for consequences, according to new research published this week in the journal Nature Neuroscience. Previous research has found that individuals who suffer from antisocial personality disorder—often referred to as sociopathology or psychopathology, despite debate over whether these are distinct conditions—lack empathy and fear. Yet this new study, from researchers at Vanderbilt University examines what these individuals may have in excess. According to the study, led by Joshua Buckholtz, a graduate student in psychology at Vanderbilt, individuals with antisocial personality disorder traits show signs of dysfunction in dopamine reward systems—suggesting that, in psychopaths, the drive toward reward can overwhelm all else.
Prior to participating in two different experiments, study subjects completed personality tests to identify presence and severity of psychopathic characteristic—including aggression, lack of empathy, and capacity for manipulation, among other things. Drawing on previous research that has established a strong link between substance abuse and psychopathology, in the first experiment researchers gave participants amphetamine, then used functional Magentic Resonance Imaging (fMRI) brain scans to monitor how dopamine release was affected by the stimulant. In a second experiment, study participants were told that they would be paid for performing a simple task, and researchers conducted brain scans while they completed the tasks.
In both experiments, researchers found that participants who had psychopathic characteristics according to the personality test, were more likely than those without those traits to have greater activity in the nucleus accumbens, the area of the brain associated with dopamine reward processing—whether in response to the chemical stimulant, or the suggestion of monetary reward.
For me, trading is not a hobby, not a game of chance not some intellectual odyssey filled with clashing egos and chest pounding pissing contests. No, for me, trading is a way to make a living, doing something I love and am good at. So my approach is a little different then some of you may be used to.
Yet every so often a communication from one you impacts me with frustration and dismay. By now I would think that if you have been with me for six months, or a year, or longer, you would be making money trading, using some ideas and techniques that I have described over the months and years of writing AllAllan. But I hear something else from these communications, I hear that many of you are not getting it.
Today I am going to present to you three ways to trade using the simplest of strategies based on end of day prices and a minimal of necessary hardware or software. I am going to use an unleveraged ETF and remove all of my more sophisticated (read: expensive) tools, using only Market Club Triangles and 3 Line Break Point charts, both very similar in their construction and entirely objective in their application.
You can trade this going forward on XLF and probably not need anything else to be successful month to month, quarter to quarter and year to year. But it is my hope you will instead, glean from this the very basic premise of a simple rule-based system that can be applied and tweaked to any number of tradables, a simple trend following trading system from which anything is possible if you only have the discipline and desire to make it work.
XLF – Market Club Triangles -Daily Chart
Their are actually two systems shown on the chart:
(1) Enter trades on appearance of WEEKLY TRIANGLES and exit on appearance of reversing DAILY TRIANGLES. If flat, RE-ENTER on appearance of DAILY TRIANGLE in direction of most recent WEEKLY TRIANGLE;
(2) ENTER/EXIT on appearance of WEEKLY TRIANGLES (disregard DAILY TRIANGLES).
Please review a collection of WWW browsing results.Date Found: Friday, 16 January 2015, 09:55:47 PM
Click for popup. Clear your browser cache if image is not showing. Comment: Volatility Is back across all asset classes. Price discovery reverting to the mean.
Date Found: Saturday, 17 January 2015, 04:18:13 PM
Click for popup. Clear your browser cache if image is not showing. Comment: US Velocity of money, historic lows. $4.8 trillion on Fed balance. None of it getting to the masses. Deflation is at the door.
Date Found: Sunday, 18 January 2015, 10:44:09 PM
Click for popup. Clear your browser cache if image is not showing. Comment: Gold teasing...
"In the minds of the statists, "Government Works Better" and 'things' work at the surface; but at the core, it's a disaster... The Americans that look to the government to 'save' them - and even gleefully thank the government for helping bail them out - fail to realize that it was the government that f##ked them in the first place..."
Simply put, "debt-financed socialism and corporatism isn't working" and a day of reckoning is coming...
(ETFTrends.com by Todd Shriber): "Betting on insider buying is again proving to be an efficacious strategy as the Direxion All Cap Insider Sentiment Shares (NYSEArca: KNOW) has been noticeably less bad than the S&P 500 to start 2015. Add to that, investors are warming to the merits of KNOW's insider sentiment strategy." [Editor's note: KNOW tracks the Sabrient Multi-cap Insider/Analyst Quant-Weighted Index (SBRQAM)]. Read article
Suppose you had the technical ability and raw materials to print up counterfeit dollars, euros or yen that were identical to the real things. Assume you could spend them as fast as you could create them with no fear of any repercussions.
Would you prudently print up only as much fresh currency as you needed for your current lifestyle? Would you create just a bit more than that to help relatives or those in need?
It is most likely you’d have your printing press running 24 hours a day, seven days a week. Becoming the richest person in the world would confer great power upon you.
You could rationalize this action because you plan to use the money for good purposes. Imagine the warm feeling you’d get by giving every person in America one million do...
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So as I was saying yesterday (Bitcoin: The Biggest Clown Show In History?), Bitcoin has several obstacles on the path to potential success as an alternative currency. But I forgot to mention hacking and theft at Bitcoin exchanges and other technical problems. This is related to the lack of government backing and the fact that the value of Bitcoins is based entirely on confidence.
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
PSW Members - well, what a year for biotechs! The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down! The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months. What could go wrong?
Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.
Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies. A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...
Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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