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…
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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


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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

 

 


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The Technical Traders

Massive Price Reversion May Be Days or Weeks Away

Courtesy of Technical Traders

Our researcher team believes a massive global market price reversion/correction may be setting up and may only be a
few days or weeks away from initiating. 
Our team of dedicated researchers and market analysts have been studying the markets, precious metals, and most recently the topping formation in the ES (S&P 500 Index).  We believe the current price pattern formation is leading into a price correction/reversion event that could push the US major indexed lower by at least 12 to 15%.

Historically, these types of price reversion events are typically considered “price exploration”.  Over time, investors push a pricing/valuation bias into the ma...



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Zero Hedge

Jeffrey Epstein Paid Doctors To Drug 'Sex Slaves': Report

Courtesy of ZeroHedge View original post here.

Victims of dead pedophile Jeffrey Epstein say he paid doctors and psychiatrists to dope them up with anti-anxiety and antidepressant medications, according to a new report in the Miami Herald

"There were doctors and psychiatrists and gynecologist visits. There were dentists who whitened our teeth. There was a docto...



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Insider Scoop

Notable Insider Buys In The Past Week: AbbVie, Kraft Heinz And More

Courtesy of Benzinga

Insider buying can be an encouraging signal for potential investors.

A packaged food giant and two drugmakers saw notable insider buying activity this past week.

Some of this insider buying occurred alongside insider sales.

Conventional wisdom says that insiders and 10% owners really only buy shares of a company for one reason — they believe the stock price will rise and they want to profit. So insider...



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Phil's Favorites

Peloton IPO Guide... And Why It Makes No Sense

Courtesy of ZeroHedge

By Scott Willis via Grizzle.com

BOTTOM LINE

At the end of the day, Peloton is a gym membership pretending to be a tech company.

We fully admit the product is exciting and unique in the market, but Peloton still faces the same problem...



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Digital Currencies

Buyer beware: How Libra differs from Bitcoin

 

Buyer beware: How Libra differs from Bitcoin

Recent revelations about the lack of privacy protections in place at the companies involved in Facebook’s new Libra crytocurrency raise concerns about how much trust users can place in Libra. (Shutterstock)

Courtesy of Alfred Lehar, University of Calgary

Facebook, the largest social network in the world, stunned the world earlier this year with the announcement of its own cryptocurrency, Libra.

The launch has raised questions about the difference between Libra and existing cryptocurrencies, as well as the implications of private companies competing with s...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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Kimble Charting Solutions

India About To Experience Major Strength? Possible Says Joe Friday

Courtesy of Chris Kimble

If one invested in the India ETF (INDA) back in January of 2012, your total 7-year return would be 24%. During the same time frame, the S&P 500 made 124%. The 7-year spread between the two is a large 100%!

Are things about to improve for the INDA ETF and could it be time for the relative weakness to change? Possible!

This chart looks at the INDA/SPX ratio since early 2012. The ratio continues to be in a major downtrend.

The ratio hit a 7-year low a few months ago and this week it kissed those lows again at (1). The ratio near weeks end is attempting to...



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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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