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Posts Tagged ‘trading stocks’

The SEC Takes on the Robots

A solution that does nothing to address the problem while reinforcing the notion that prices aren’t based on value but rather the result of automated trading programs. But we knew that. – Ilene 

The SEC Takes on the Robots

Courtesy of Jr. Deputy Accountant 

Again, it’s good to have a "just in case" or twenty readily available, right?

Business Week:

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.


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Why Futures are Annoying

Why Futures are Annoying

Courtesy of TraderMark at Fund My Mutual Fund

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. 


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JP Morgan’s Perfect Quarter More Evidence “Game Is Fixed”

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 

JP Morgan’s Perfect Quarter More Evidence “Game Is Fixed”

Courtesy of Larry Doyle at Sense on Cents 

First Goldman Sachs. Now JP Morgan.

The shop where I worked from 2000-2006 released a report highlighting the fact that it made money each and every day of the 1st quarter. Thanks again to Matt for bringing this story to my attention. Bloomberg highlights, JP Morgan Traders Match Goldman’s Quarter with No Trading Loss,

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


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GS and BP, aka The Axis of Evil Stocks, Up Today

GS and BP, aka The Axis of Evil Stocks, Up Today

Courtesy of Joshua M Brown

One has been accused of serially poisoning investors, the other of serially poisoning the environment.

Call it an oversold bounce, but in a wash of red stocks both BP ($BPand Goldman Sachs ($GSare trading higher today.

Here are the two Axis of Evil Stocks versus the S&P 500 as of 2pm:

 

Curious….

hat tip Eddy Elfenbein who noticed this too. 

 


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Driven toward reward without regard for consequence

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 

Driven toward reward without regard for consequence

Courtesy of TIME, by Tiffany O’Callaghan

TIMEAn 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.

The findings suggest that individuals


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Basic Trading 101

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Basic Trading 101

Courtesy of Allan

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
 

market club charts
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).


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Help One Of Our Own PSW Members

"Hello PSW Members –

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 jennifersurovy@yahoo.com 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.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743"

Thank you for you time!

 
 

Zero Hedge

Congressional Hearing On Hedge Fund Tax Evasion Through "Fictional Derivatives" - Live Webcast

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As reported yesterday, at 9:30 am this morning the permanent subcommittee on investigations will hold a hearing in which it will expose the latest tax-evasion loophole used by select high-frequency trading hedge funds which has the technical name "basket options", but which, thanks to Carl Levin's mnemonic of fictional derivatives" will be better known as such (read the full story How RenTec Made More Th...



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Chart School

June Inflation Largely Attributable to Gasoline Prices

Courtesy of Doug Short.

The Bureau of Labor Statistics released the June CPI data this morning. Year-over-year unadjusted Headline CPI came in at 2.07%, which the BLS rounds to 2.1%, essentially unchanged from 2.13% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.96% (rounded to 2.0%), up from the previous month's 1.83%. Of particular interest is the fact that month-over-month Core CPI (less food and energy) rose only 0.05% (rounded to 1.0). The headline MoM increase was largely driven by higher gasoline prices (which have dropped eight cents per gallon over the last two weeks).

Here is the introduction from the BLS summary, which leads with the seasonally adjusted data monthly data:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in June on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reporte...

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Insider Scoop

NQ Mobile Shares Plummet After Announcing Dismissal Of PwC

Courtesy of Benzinga.

Related NQ Investors Focus On Earnings Rather Than Geopolitical Tensions NQ Mobile In Possible Short Squeeze; Muddy Waters Sticks To Guns

Shares of NQ Mobile (NYSE: NQ) dropped as much as 24 percent in Friday's pre-market after the company announced that it has dismissed Pricewaterho...



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Phil's Favorites

Holier than Thou: Why Should Anyone Believe the US, Ukraine, or Russia? What is the US Attempting to Hide?

Courtesy of Mish.

I am quite tired of rhetoric from the Obama administration and Kiev regarding the situation in Ukraine. Hardly any of it is believable.

Indeed, some Ukraine propaganda efforts of Kiev are so amateurish they appear as sloppy acts of desperate coverups.

If so, then it is far more likely Ukraine is the guilty party, not the separatists. If you are innocent, you do not choose such tactics.

What is the US and Kiev Attempting to Hide?

Earlier today, Obama Issued a Stern Warning to Russia coupled with a statement "What exactly are they trying to hide?"

That's a good question. But let me turn the tables by asking: "What exactly is the US and Kiev attempting to hide?"

C...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Sabrient

Sector Detector: Bulls remain unfazed by borderline Black Swans

Courtesy of Sabrient Systems and Gradient Analytics

Despite a highly eventful week in the news, not much has changed from a stock market perspective. No doubt, investors have grown immune to the daily reports of geopolitical turmoil, including Ukraine vs. Russia for control of the eastern regions, Japan’s dispute with China over territorial waters, Sunni vs. Shiite for control of Iraq, Christians being driven out by Islamists, and other religious conflicts in places like Nigeria and Central African Republic. But last Thursday’s news of the Malaysian airliner tragically getting shot down over Ukraine, coupled with Israel’s ground incursion into Gaza, had the makings of a potential Black Swan event, which in my view is the only thing that could derail the relentless bull march higher in stocks.

Nevertheless, when it became clear that the airline...



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OpTrader

Swing trading portfolio - week of July 21st, 2014

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's the latest Stock World Weekly. Please use your PSW user name and password to log in. (You may take a free trial here.)

#452331232 / gettyimages.com ...

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Option Review

Dunkin' Put Options Change Hands Ahead Of Earnings

Dunkin’ Brands Group, Inc. (Ticker: DNKN) put options are active on Friday as shares slip on a downgrade to “Neutral” from “Buy” (with a 12-month target price of $45.00) at Janney Montgomery, and perhaps ahead of the company’s second-quarter earnings report next Thursday. Shares in the name are down 1.2% just before midday to stand at $43.36 and off the lows of the session. The stock has dropped nearly 20% since reaching a 52-week high of $53.05 in March.

The most traded contracts on DNKN today are the Aug 40.0 strike put options, with nearly 5,700 contracts in play against open interest of just 452 contracts. Mos...



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Market Shadows

Danger: Falling Prices

Danger: Falling Prices

By Dr. Paul Price of Market Shadows

 

We tried holding up stock prices but couldn’t get the job done. Market Shadows’ Virtual Value Portfolio dipped by 2% during the week but still holds on to a market-beating 8.45% gain YTD. There was no escaping the downdraft after a major Portuguese bank failed. Of all the triggers for a large selloff, I’d guess the Portuguese bank failure was pretty far down most people's list of "things to worry about." 

All three major indices gave up some ground with the Nasdaq composite taking the hardest hi...



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Digital Currencies

Bitcoin Vs Gold - The Infographic

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While Marc Faber has said "I will never sell my gold," he also noted "I like the idea of Bitcoin," and the battle between the 'alternative currencies' continues. The following infographic provides a succinct illustration of the similarities and differences between gold and bitcoin.

Please include attribution to www.jmbullion.com with this graphic.

...

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Pharmboy

Biotechs & Bubbles

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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