Posts Tagged ‘dealers’

The POMO Submitted-To-Accepted Ratio: A Tell On How To Frontrun The Frontrunning Primary Dealers

The POMO Submitted-To-Accepted Ratio: A Tell On How To Frontrun The Frontrunning Primary Dealers

Courtesy of Tyler Durden

To those who look to Fed POMO days as a guaranteed panacea to underperformance and an even more guaranteed green close, you are right (at least, so far). But that is only half the story. It turns out that combing through POMO data yields a very surprising set of outcomes, namely, that the ultimate return on any given POMO day is almost exclusively a function of the Submitted-to-Accepted ratio. As John Lohman highlights, "the generic market effect on POMO days (i.e. stocks and yields up relative to non-POMO days) should be pronounced when the submitted-to-accepted ratio is relatively low (“meets expectations”) and muted when the ratio is high (“a negative surprise”, particularly if said Dealers had already positioned themselves in pre-POMO trading, based on a set of expectations regarding the outcome)." Indeed, the empirical result is precisely that. Which is why in addition to keeping track of POMO days, a far more critical piece of information is tracking the S/A ratio disclosed every day at 11am. If low, and if market performance is below a specific bucket’s average, it may be a green light for a stratospheric ramp into market close, and a signal to frontrun the market alongside the Primary Dealers.

Without further ado, here is the statistical data compiled and associated narrative by John Lohman that predicts not only market performance, but Primary Dealer frontrunning via Fed monetization generosity.

POMO Submitted to Accepted ratio

In a prior Zero Hedge post (here), it was clearly demonstrated (to all save a few unnamed asshats who believe in coincidences against all statistical probability) that equities and interest rates tend to rally on POMO days relative to non-POMO days.  Here, using the Fed’s Total Par ‘Accepted’ and ‘Submitted’ data, we can show that, not only is this effect not a coincidence, but that the magnitude of the market’s reaction to POMO on any given day is positively correlated with the outcome of that day’s operation.

The POMO ‘Submitted-to-Accepted’ ratio can be thought of as being similar to a reverse bid-to-cover ratio in Treasury auctions.  Primary Dealers submit a certain volume of paper and the Fed accepts a portion of it.  If POMO is indeed having a direct impact on the markets, there should be a relationship between the submitted-to-accepted ratio and…
continue reading


Tags: , , , ,




GM: The Deep, Dark Shadows of Bankruptcy

Update on GM, courtesy of TIME 

GM: The Deep, Dark Shadows of Bankruptcy

A GM dealership in Los Angeles
A GM dealership in Los Angeles
Mark Ralston / AFP / Getty 

General Motors appears to be on a fast road to bankruptcy. Chief executive officer Fritz Henderson has already described a bankruptcy filing as "probable" as the U.S. Treasury’s June 1 deadline for reorganizing the company draws near. Also, the fact that GM announced it was moving up its date for paying suppliers from June 2 to May 28 further suggests bankruptcy is likely, says Brad Coulter of O’Keefe & Associates of Bloomfield Hills, Mich., which specializes in helping distressed manufacturing companies. "To me, it’s a pretty clear indicator that they plan to file right around the June 1 deadline." At the same time, half a dozen senior GM executives have dumped shares, even though the stock has been trading for less than $2.

Meanwhile, the work necessary for averting a GM bankruptcy remains undone. Though the automaker is reportedly making progress on negotiations with the United Auto Workers (UAW), open issues remain, and the GM even got into a public spat with the UAW over importing cars from China and Mexico. The union is now demanding more assurances as to what cars GM plans to build in the U.S. in the future. (See portraits of autoworkers.)

On a more positive note, the two sides have reportedly reached agreement on how to finance the Voluntary Employees’ Beneficiary Association (VEBA), which was set up to fund retiree health-care benefits for GM’s blue-collar workforce. GM is said to be agreeing to deposit half the $20 billion it owes the VEBA and to fund the other half with GM stock. The agreement appears to be very similar to the deal Chrysler LLC reached with the UAW. That deal puts the UAW in control of the new Chrysler, with 55% of the stock. The union has also reportedly agreed to cut labor costs, though neither the union nor GM would confirm the figures.

As part of the overall restructuring plan put forward by the company, 16 manufacturing facilities in the U.S. will be closed, including four assembly plants, according to Alan Reuther, director of the UAW’s Washington office.

In a related move, GM announced


continue reading


Tags: , , , ,




Mapping The Chrysler Fallout

Mapping The Chrysler Fallout

The map below demonstrates the chickenpox impact that just the initial round of Chrysler dealer shutdowns will have on the US economy. As is evident from the map (an interactive version of the map can be accessed here), the pain will be focused east of the Rockies, although major West Coast metropolises will not be spared either: every dot represents an automotive dealer that Chrysler disclosed today will be made redundant.

As for the hardest hit states, the biggest losers in terms of shutterings will be:

  • Pennsylvania: 53
  • Ohio: 47
  • Texas: 45
  • Illinois: 43
  • Michigan: 40
  • California: 31
  • New Jersey: 30
  • Florida: 29
  • New York: 26

 

 


Tags: , , ,




 
 
 

Phil's Favorites

How high will unemployment go? During the Great Depression, 1 in 4 Americans were out of work

 

How high will unemployment go? During the Great Depression, 1 in 4 Americans were out of work

Unemployed people wait outside a government office in NYC in 1933. AP Photo

By Jay L. Zagorsky, Boston University

CC BY-ND

The U.S. unemployment rate climbed from a half-century low of 3.5% to 4.4% in March – and is expected to go a lot higher.

But could the rate, as ...



more from Ilene

Zero Hedge

Mysterious Colorado Doomsday Shelter For When "Law & Order Breaks Down" Sees Spike In Interest

Courtesy of ZeroHedge View original post here.

As the pandemic unfolds across the US, city dwellers are getting the hell out of dodge and escaping to rural areas. We noted this last week, with many leaving large metro areas in California, fleeing for the mountains and rural communities to limit their probabilities of ...



more from Tyler

Biotech/COVID-19

Why wear face masks in public? Here's what the research shows

 

Why wear face masks in public? Here's what the research shows

People have resorted to using scarves and bandanas as face masks to protect against spreading coronavirus. While cloth masks aren’t as effective as surgical masks, research suggests they can limit the spread of droplets. Jens Schleuter/Getty Images

Hector Chapa, Texas A&M University

With the coronavirus pandemic quickly spreading, U.S. health officials have changed their advice on face masks and now recommend people wear cloth masks in public areas where social...



more from Biotech/COVID-19

ValueWalk

Junior gold stocks offer a place of refuge in a falling market

By Michelle Jones. Originally published at ValueWalk.

Junior gold stocks have taken a beating alongside other stocks, but history suggests this could be the time to dive in. The Vaneck Vectors Junior Gold Miners ETF is down from where it was in February, although it’s starting to show signs that it could revive soon.

Q4 2019 hedge fund letters, conferences and more

Crescat likes junior gold stocks

In their March update to investors, Crescat Capital said junior gold stocks retested the lows of a nine-year bear market. ...



more from ValueWalk

Kimble Charting Solutions

Depression Coming or Is the Bottom Already In? Joe Friday Says Your Answer Lies Here!

Courtesy of Chris Kimble

Are we headed towards a Depression or is the worst already behind us? In today’s world, comparisons to the great depression are easy to find.

Are the Depression concerns well founded or are the declines of late already pricing in a bottom?

In my humble opinion, this chart and the upcoming price action of this index will go miles and miles towards telling us if we are headed towards very tough times or if the huge declines of late are actually in a bottoming process.

This chart looks at the Thomson Reuters Equal Weighted Commodity Index on a monthly basis over the past 54 years. The index has been heading south, reflecting weakness in demand for basi...



more from Kimble C.S.

Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

http://www.insidercow.com/ more from Insider

The Technical Traders

Founder of TradersWorld Magazine Issued Special Report for Free

Courtesy of Technical Traders

Larry Jacobs owner and editor of TradersWorld magazine published a free special report with his top article and market forecast to his readers yesterday.

What is really exciting is that this forecast for all assets has played out exactly as expected from the stock market crash within his time window to the gold rally, and sharp sell-off. These forecasts have just gotten started the recent moves were only the first part of his price forecasts.

There is only one article in this special supplement, click on the image or link below to download and read it today!

...

more from Tech. Traders

Chart School

Big moving Averages and macro investment decisions

Courtesy of Read the Ticker

When price is falling every one wonders where demand will come in.


RTT black screen Tv videos study the simplest measure of price (simple moving average). What has happen before guides us now. 














Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, ...

more from Chart School

Members' Corner

10 ways to spot online misinformation

 

10 ways to spot online misinformation

When you share information online, do it responsibly. Sitthiphong/Getty Images

Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



more from Our Members

Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



more from Bitcoin

Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

more from Promotions

Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



more from Lee

Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

more from M.T.M.





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...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.