This page has been archived and commenting is disabled.
The Day The Market Almost Died (Courtesy Of High Frequency Trading)
- Black Swan
- Black Swans
- Capital Markets
- Citadel
- CRAP
- DE Shaw
- Flash Orders
- Flash Trading
- Goldman Sachs
- goldman sachs
- High Frequency Trading
- High Frequency Trading
- Kaufman
- Market Crash
- Market Share
- Matt Rothman
- Meltdown
- NASDAQ
- Open Letter To Quant Funds
- Retail Order Flow
- Short Interest
- Sigma X
- Sigma X
- SONAR
- Sovereign Debt
- Volatility
A year ago, before anyone aside from a hundred or so people had ever heard the words High Frequency Trading, Flash orders, Predatory algorithms, Sigma X, Sonar, Market topology, Liquidity providers, Supplementary Liquidity Providers, and many variations on these, Zero Hedge embarked upon a path to warn and hopefully prevent a full-blown market meltdown. On April 10, 2009, in a piece titled "The Incredibly Shrinking Market Liquidity, Or The Black Swan Of Black Swans" we cautioned "what happens in a world where the very core of the capital markets
system is gradually deleveraging to a point where maintaining a liquid
and orderly market becomes impossible: large swings on low volume,
massive bid-offer spreads, huge trading costs, inability to clear and
numerous failed trades. When the quant deleveraging finally catches up
with the market, the consequences will likely be unprecedented, with
dramatic dislocations leading the market both higher and lower on
record volatility." Today, after over a year of seemingly ceaseless heckling and jeering by numerous self-proclaimed experts and industry lobbyists, we are vindicated. We enjoy being heckled - we got a lot of it when we started discussing Goldman Sachs in early 2009. Look where that ended. Today, we have reached an apex in our quest to prevent the HFT "Black Monday" juggernaut, as absent the last minute intervention of still unknown powers, the market, for all intents and purposes, broke. Liquidity disappeared. What happened today was no fat finger, it was no panic selling by one major account: it was simply the impact of everyone in the HFT community going from port to starboard on the boat, at precisely the same time. And in doing so, these very actors, who in over a year have been complaining they are unfairly targeted because all they do is "provide liquidity", did anything but what they claim is their sworn duty. In fact, as Dennis Dick shows (see below) they were aggressive takers of liquidity at the peak of the meltdown, exacerbating the Dow drop as it slid 1000 points intraday. It is time for the SEC to do its job and not only ban flash trading as it said it would almost a year ago, but get rid of all the predatory aspects of high frequency trading, which are pretty much all of them. In 20 minutes the market showed that it is as broken as it was at the nadir of the market crash. Through its inactivity to investigate the market structure, the SEC has made things a million times worse, as HFT-trading seminars for idiots are now rampant. HFT killed over 12 months of hard fought propaganda by the likes of CNBC which has valiantly tried to restore faith in our broken capital markets. They have now failed in that task too. After today investors will have little if any faith left in the US stocks, assuming they had any to begin with. We need to purge the equity market structure of all liquidity-taking parasitic players. We must start today with High Frequency Trading.
Further to demonstrate this point, we bring our readers attention to our post from April 1, 2009 titled An Open Letter To Quant Funds. In it we said:
In his April 14th report Matt Rothman wrote about a dramatic,
parabolic outperformance trend for names with high short interest, low
prices and fundamentally weak names. He opined that all conditions for
this trend to end are in place. Contrary to his very valid arguments,
the trend accelerated yesterday.Stocks with poor fundamentals,
market share losses and poor earning prospects that quantitative
managers tend to short, gained more than higher quality long positions.
It
is clear from Mr. Rothman's report that this trend is a main
contributor to outsized losses for quant managers. Some of his
respondents admitted to hitting P&L stops. Recent
acceleration of this trend, aka the "crap rally" clearly further
damaged quantitative managers performance and resulted in further hits
of P&L stops. The resulting short covering and long index hedges
have perpetuated the market rally for now.At this point, it is hard to say what set off this process, but it is currently accelerating and feeding on itself.
From
the timing of Mr. Rothman's poll of quant managers, it is clear that
smaller managers had ample time to exit positions and get flat.
Continuation of the "crap rally" could indicate larger, systematic problems at the largest, most sophisticated quant managers.We
are paging Jim Simmons, DE Shaw, Citadel, LSV, Jacobs Levy and
"significant"' others. Are you all right? We need you alive, small and
nimble, to help provide liquidity and maintain orderly markets, not outsized, bigger than the market and dead.If you still can, please come out and speak up before it is too late.
Today, it was too late. Liquidity disappeared.
And now we have to deal with the consequences. One amateurish way is to cancel trades which is what the Nasdaq is doing. This is simply pathetic, and indicates that everyone is powerless to stand before the consolidated idiocy of the HFT "cash cows."
One person who does get it is Senator Kaufman, who should be a shining example to all the other idiots and traitors in both Congress and Senate. Senator Kaufman issued the following release:
“As I said on the Senate floor today, the growing sovereign debt and banking crisis in Europe is very troubling. The U.S. needs to get its financial house in order through strong Wall Street reforms that will serve as a lasting bulwark against financial instability.
“I also have been warning for months that our regulators need to better understand high frequency trading, which appears to have played a role today when the US market dropped 481 points in 6 minutes and recovered 502 points just 10 minutes later. The potential for giant high-speed computers to generate false trades and create market chaos reared its head again today. The battle of the algorithms – not understood by nor even remotely transparent to the Securitiesand Exchange Commission – simply must be carefully reviewed and placed within a meaningful regulatory framework soon.”
It is time fot the SEC to step up to its own sole duty, which is not to guarantee itself jobs at Goldman Sachs (well, not so much anymore), or to watch 18 hours of transvestite porn each day, but to protect the US investor from such borderline criminal activity as High Frequency Trading gone amok. Forget the Fat Finger - today we were one Fed Finger away from a meltdown that would make Black Monday seem a joke in comparison. Next time we won't be so lucky.
We will have much more to say on this shortly, but we leave you with the words of Dennis Dick of Bright Trading:
Predatory Market Making May Have Led to Crash
Dennis Dick, CFA
Bright Trading LLCOn January 4th of this year, Rambus (RMBS) fell 30% in a matter of five minutes. It immediately bounced back and was later attributed to a trader with a “fat finger”. When this incident occurred, I discussed on Zero Hedge, the possibility of this being more than just a trader with a “fat finger”. (http://www.zerohedge.com/article/rambus-hft-fat-finger-precursor-things-...). I speculated that this could have been caused by a market structural problem. This could have been caused by a lack of liquidity due to predatory market making.
Today the same incident occurred, except this time, it happened in the overall market. Again, the media is blaming a trader with a fat finger. This may have been the catalyst but it was not the problem.
Predatory market making practices are driving liquidity providers out of the market. Algorithmic systems constantly step in front of displayed liquidity providers, and discourage them from placing passive limit orders. They are programmed to automatically step in front of displayed limit orders, to be at the front of the line for execution. This practice is especially prevalent in thinner stocks. If a human trader places an order at $20.05, the algorithmic system automatically bids $20.06. If the human raises their bid to $20.07, the computer goes to $20.08. This discourages true liquidity providers, and they place less passive limit orders.
Even in the 5 minutes that the market was crashing, these algorithmic systems were still abusing displayed orders. I placed a few buy orders during the crash, and my orders were still automatically stepped in front of by a penny. As my friend, Jason Fournier mentioned in his comments to the SEC, “not only are they discouraging liquidity, they are not allowing it.”
Broker-dealer internalization also abuses displayed liquidity as they continuously internalize retail order flow in front of displayed limit orders. In some cases they step in front of the order by as little as 1/100th of a penny, an abusive practice called sub-pennying.
Broker-dealers justify this practice by saying they were giving their customer price improvement. But they completely ignore the unquantifiable loss to the market participant who was displaying the order, and did not receive the fill.
These predatory market making practices are having a devastating effect on liquidity in our market. As true liquidity providers become more discouraged, and place less passive limit orders, the depth of the market gets thinner. Therefore, when we have a trader with a “fat finger” accidentally make a mistake, there are less liquidity providers to cushion the blow.
If these predatory market making practices are allowed to continue, eventually there will be no real liquidity in the depths of the market, and when there is a market impact event, we’re in big trouble.
Today was just a taste of things to come, if our regulators don’t take note.
And for the benefit of the SEC, this is what a broken market looks like.
»
- 60741 reads
- Printer-friendly version
- Send to friend
- advertisements -
the stock that went to a penny .. lol today was the day to grant stock options.. for several insiders ..
what a deal
just for fun. down from 30 some thing to a penny for a split amount of time // good enough
wasn't that "excelar" or something? heard it but missed the ticker.
oh, to have had a few bucks of 'buy' orders in at 5cnts... sigh.
So, now markets can be driven to circuit-breaker level in a few minutes. That's all you need to know, doesn't matter what caused it.
Don't go to sleep. Ever.
Exactly. Why bother betting on a fixed game? Unless you're the mark.
On his behaly, I will now accept apologies from those who have been bad mouthing Robert Prechter on ZH for the last several months.
BTW - you ain't seen nuthin' yet - - -
prechter on gold has been more than pathetic
On his behaly, on his behiny - nobody cares because what happened today doesn't have squat to do w/ Prechter. Apples & oranges. Tyler was the one who gave us the what and the why.
Tell Bob to buy some gold before his skinny ass gets frozen out...
Congratulations on your foresight, Zero Hedge. Excellent work, and I think we as readers even feel vindicated, some of us, for reading your work over the last year+.
On the bright side, your web site is surely having a very "high frequency" day and the threads will be "liquid" indeed.
(Oh yeah. Please won't someone break all trades today that cost the algorithms money? After all, they weren't "real trades"--kind of like the way all the new varieties of crossing stock aren't "real trades". Cancel the whole fucking market, maybe.)
i.e. "behalf" - so blown away I can't spell - and yes I am short.
Dude - there's an "edit" button...
Better yet, there is a spell-check function.
I use it when I "know" I'm right.... just in case.
Google also works...(for spelling check)
15 years I've worked in the capital markets...and ZH is the most honest, tell it like it is, and knowledgeable place to be.
This is the explanation...not BS as "rogue trades". And if today is the day the market died...so bye bye Miss America and pie.
But at least I've been supplied a clever reason..I've been treated as a man, and I was and am short bloody euros.....
Thanks ZH...well done...and bring it on!
If 70-80% of the market is HFT by the primary dealers, and you unplug their computers what's left? Looks to me like Catch 22, lose/lose either way.
We can talk about reforming the market when the Dow reaches 1500, by then all resistence will be broken.
TD Rules!
Personally I can't wait to see how the fat finger fucks spin this into a reason for not breaking up the TBTFs ... ;-)
American Pie, if you're in the mood.
http://www.youtube.com/watch?v=uAsV5-Hv-7U
She's Come Undone!
http://www.youtube.com/watch?v=VLMF5GM0Kt8
tyler and a dozen others have warned .
some as long as a few years ago.. but the kudos go to the person who was the few moments from the call.
even the depression years gave out their lessons ,
nobody with a twitch of sense ,and mostly the zit faced wonder creatures raised at the alter of the Keynesian lie
gold a life line .. and still several here on these august forums read nothing see nothing but spout nonsense about gold .
the raiders of the lost zit cream bunch
'amighty!
The dumpster is an invaluable resource here at mighty ZH.
Do what he and I say: Buy gold!
Shhhh! You'll wake up the Yipster. He's napping on the couch in his mom's basement. He has to get up early to deliver those papers before his shift at the pizza delivery gig.
Haha.....I was just thinking the same thing.
Most likely direction for some time is flat while professionals and amateurs alike recover from the devasting glitch in the Matrix that we all just experienced.
In other news.....LEO got shanked like a wayward San Quentin soldier.
Markets almost invariably go down faster than they go up.
I believe it's because, to get a wary public into the market, Exchanges need to create an illusion of never-ending rising prices. This won't happen if prices are going down for the same amount of time they spend going up.
Thus, you have all those 20-40 point positive days, we recently saw, followed by a sharp, violent drop.
yeah, yeah--HFT. And debt goes up, oil goes up and riots go up--Lord knows that doesn't have an effect. What difference does it make when "free markets" cancel trades? How "free" is that? Sounds to me like a 4000 point decline tommorrow. We'll see...is this '87? They blamed "the computers" back then. yeah, that's right--we even had computers back then "TD." Of course CNBC fiddles while Greece pays 4% interest one day and 20% the next. And CNBC plays "blame the computer." It's a person cancelling the trades. That's a violation. Our markets are not only no longer free--they're perfectly arbitrary. One can no longer trade them and the only people who can "benefit" at this point are index funds and institutional investors. And the worthless scum-fucks at CNBC tell us on TV to "go fuck yourself." I'll listen to Cramer...but right now they're all nothing more than over paid cheerleaders who probably don't suck dick nearly as well.
On the money! It was a near perfect storm. the 100dma and the major trend line (Mar - Feb lows) were a good support for THE humans. In fact, this human was ready to place a buy himself. The "Predators" went to hunt stops, in usual fasion, below support, but then with the 200dma in sight, the momo algos kicked in and took it down. Several major stocks bounced off their 200dma.
A "fat fingered" mistake = CNBC
My question is just because this happened on a macro level, why is it any less/more illegitimate than any other trade day?
I thought God's chosen, Goldman Sach's Plunge Protection Team, fired up their algos to save our markets from the nefarious ones:
http://newyork.fbi.gov/dojpressrel/pressrel10/nyfo021110.htm
http://seekingalpha.com/article/147260-goldman-sachs-thoughts-on-the-dev...
I love the fat finger story that is circulating. Come on people?? But, if by chance there is some truth to it then it would surely be showing up on someone's P & L soon. Meaning one of the walking dead banks (I mean hedge funds) just took one giant step closer to their awaiting grave.
This was the second "fat finger" event of the year. Wasn't it? I may be wrong; if so, I apologize.
Nice piece and I linked it. ZH was way out front of everyone on this.
Today was funny. I thought Matt Miller was going to make Joe Saluzzi throw up on his Skype connection this afternoon. I could not bear to watch CNBC. I turned it on for a minute, and they were screaming 'buy buy buy.'
Here is a bit of market trivia for all those tempted to blindly buy the dip...
http://jessescrossroadscafe.blogspot.com/2010/05/plunge-1000-point-drop-on-dow-driven-by.html
Now we go into the Non-Farm Payrolls report. This is one broken market, and the plunge was no accident, but the consequence of corruption, neglect, and obscenely ineffective political governance and monetary policy. But we might see a bounce on Friday, and quite a bit of official reassurance over the weekend.
The pattern of that market dislocation was for an initial decline on Black Thursday (24th), a recovery on Friday (25th), an uneasy or blue Monday (28th), and then the Great Crash itself on Black Tuesday, October 29, 1929.
But even then, with the market down about 40%, it had a remarkable distance to go. The bottom in US equities was finally reached, down 90% from the September 1929 top, in July of 1932, the trough of the Great Depression.
I am not saying that this will happen again. It turned out very differently in 1987 thanks to a flood of liquidity from the Greenspan Fed. Can Bernanke do the same thing again? One great difference between now and 1929 is that a fiat currency can be devalued, and enormous amounts of liquidity added, with a few phone calls. The Fed is already under pressure to open new dollar swaplines with the ECB.
But it is good to remember that caution is advisable when investing - always, but especially when one decides to exercise their greed reflex.
+++Agreed ZH. US equity (and it's derivatives) market structure and mechanics are FUBAR at this point. Today was ridiculous and the "news" about Greece and the Euro was a swan of lilly whiteness.
First it was a P&G fat fingered trade then it was an S&P mini fat fingered trade. I don't know the real story at this point but you shouldn't even be allowed to whack futures in that size in a fast, down market. And NASDAQ wants a "do-over" - give me a break. How do you unwind trades that were made off of trades that are being cancelled?
I don't know about you but I'd rater have teenie spreads (no, not porn) and NYSE specialists printing money for themselves than this bullshit. Hey but if you dumped your 401K today down 900pts. it only cost you $9.99 commish!!
Is this what we fragmented the market into smithereens for?
Also, like flying an airplane, a computer can do the job just as well, sometimes better 98% of the time. But when you're landing at night with an engine gone in a thunderstorm you want a human being at the controls not HAL, the little-algo-that-could.
Even ten years ago you could say with a straight face that America's capital markets were peerless, a national treasure and the biggest detractors of the American economic/political /social system(s) would counter with "yes, but..." as opposed to "no way..."
Now? A few more days like this (wait until a US municipality bites the dust) and that torch is passing East, probably to China (or India). Bye, Bye Miss American Pie...
Remember Washington - besides medicine (d'oh!), aero-space(?) and scriptwriting for 30-Rock, this is like all we have left now.
I finished reading the post and got my answer. Am truly amazed at the speed and volume of response on this thread.
The US Dollar can go up who would have thought?.
UUP UUP & away. Go you loose monetary piece of a good paper thing!
Did the CME stealthily halt trading for 4 seconds at the bottom???
For those of you that have the ability to look at 1-second charts, go to today's bottom (14:45:30 EST) in the ES and look at price action. I have a DTN data feed that appeared to handle the crash perfectly, yet I somehow am missing 4 seconds of data (No high, low, open, close, volume, etc.). I even redownloaded the data tonight and am still missing these 4 seconds. I would like to know if this is merely a major coincidience (that the 4 seconds of data I am missing just so happens to be the exact bottom) or if it is possible the CME stealthily halted trading for 4 seconds in order to break the algorithmic selling.
Fascinating...
call it what you will..... i have been following you guys long enough, just to prove to myself that i'm not insane, or at least that i'm not the only one that's insane.... actually, NNT was the one that cured my depression, not because he told me something that i didn't know, but because he told me exactly what i was thinking. it's really tough living in that kind of company, even my mother hates me...... good job...! best regards, econolicious
NASDAQ canceling trades of stocks that varied more than 60% between 2:40 and 3:00???
Has this ever happened before??? Sounds like a cheesy sports book...
It's the new out of bounds rule. 66.7 percent retracements are the new out of bounds lines. Next they'll add field goals and guys to fib sequences withing fib sequences flag poles on chains.
Wow, absolutely crazy day.
I don't think anyone believes the fat fingered trade hypothesis, everyone headed for the exits and the doors were too small. CNBC did its part to be fair, their incessant pumping of the Greek riots certainly didn't help to quell the situation.
I was listening to the live squawk of the pit and it truly was a thing of panic in there, everyone and their mother was selling and there wasn't a single bid, started off with Deutsch Bank which tells you something in itself.
Was watching CNBC live as this was happening.
Loved Cramer's comments on how he wanted to hit 49 1/4 bid for 50k of PG.
Right... and HE'S the one that that got the stock back up to 60 right? Jokes!
Cramer needs to brush up on basic arithmetic. The advice he gave on how play a situation like this is to buy a stock that was yielding 2% but is, now, yielding 5%.
For that to happen, a stock would have to go down 60%, not too likely considering the market only went down 3% and at its worst was down 10%.
Did you happen to catch Cramer when he popped in on Kudlow's show, today? Wow, what a couple of meat heads. They were actually wasting airtime discussing the "possibility of hackers" as the cause of the drop. come on.
I'm surprised they didn't blame the same group of short sellers who spread those nasty rumours about Lehman being insolvent.
Those two buffoons really outdid themselves tonight. The only way they could top that would be to put on black face and do an Amos n Andy routine.
Was Sergey on fur(low) today?
I could use a little around here. My father finally "woke up" to whats going on, right about the time the DOW dropped 999.999 points, today.
When I started in on the whole government/FED/Wall Street et al business, again, for the 10th time, he sort of listened. I want to present him with some articles/posts that are fairly easy reading, and preferably are written by a name he might recognize. Any help would be appreciated. If this helps - he was surprised at the notion that the FED actually manipulates the markets by injecting liquidity through PM's. "Thats not a free market!" I know, dad. I love the guy.
Can't really help, not knowing what names your dad would recognize that might be worth
reading... Best I can do is lead you to the clearing close to where I tumbled down the rabbit hole:
http://www.zerohedge.com/article/do-you-read-zero-hedge-review-zero-hedges-most-popular-articles-all-time2009
http://247wallst.com/2010/03/31/the-247-wall-st-twenty-best-financial-blogs/
You could do worse than looking up Rosenberg's longer missives here on ZH; perhaps former chief economists of ML is respectable enough a name. Also anything by Albert Edwards of Societe Generale (featured here often).
Yves at Naked Capitalism, Jesse at http://jessescrossroadscafe.blogspot.com/
I guess I could/should have been archiving/bookmarking more along the way...
Thanks for the help.
Have him watch Marc Faber and pay close attention to the dates, he is very good at making market calls and explaining what is going on.
Max Keiser is also good http://www.maxkeiser.com
I honestly would not mind the Fed stepping in (like the BoJ) and injecting more liquidity. We all can be bearish, but this thing can get seriously ugly. It's in the best interests for us to NOT go through a 1930s-style depression.
CL, with all due respect, 36.5 million people are already relying on food stamps to feed their kids. Based on that data, some will say, we are already in a depression. The only reason you are not seeing the soup lines is because of the societal safety net. Without that...
http://articles.latimes.com/2010/jan/12/nation/la-na-food-stamps12-2010jan12
People actually starved in the 30's depression.
Want to bet on what percentage of food stamp users overlap with the set of people who qualify as obese?
Only in America can you be starving and fat at the same time. Besides, if you can boil water, basic healthy foodstuffs are ridiculously cheap in this country.
And they're not "food-stamps" any more they're credit cards that look like credit cards.
I beg to differ on the food note....have a friend that is diabetic...she always rails at how cheap fast food, refined carbs crap is..and how expensive healthly stuff like produce is...nutritionsist say the cheap calories in the grocery store is the worst stuff, sugar, refined carbs, things with corn syrup etc...
if you aren't worried about over-carbing you can eat lots of rice and beans,but good lean protein and produce is expensive compared to crap...
Food Inc covers this in detail.
http://www.foodincmovie.com/
Totally agree.
also watch what monsatan is upto in India.
Google "indian farmer suicides"
I second the MoneyMutt. FoodStamps are soup lines in an envelope. FoodInc is a great film. Most of what we eat and our livestocks eat is simply a "derivative" of soy or corn. Neither were meant to subsist on this
The world is filled with people who are demonstrably not getting fat off of a staple rice and bean diet.
yes, you gain weight by eating more calories than you burn..if you eat carbs but limit your intact, you do not get fat....but as soon as the refined carbs are cheap relative to salaries..voila, fat people..Ibecause cost to get more calories is not prohibitive....I had a friend who went to China in early 90s and said the only fat Chinese person they saw was a Chinese tourist with a British accent but now we she goes back, many fatties...
What does our obese Surgeon General have to say about this, and where did they hide her giant ass anyway? Maybe Barry has made a smoke screen for her with his three packs a day.
cyan you must be kidding. no one wants another "1930's-style depression," but nature does not abide the whims of men. the price of goods in our economy simply does not reflect underlying demand, and this is not sustainable, FED intervention or otherwise. we have gotten ourselves into an untenable and unsusainable situation and we need to get ourselves out, which will require pain and suffering. the best we can hope for is the creation of a better system on the other side. people are complacent and they need to wake up and rediscover the political heritage that led their ancestors to fight a war for their freedom. if you think FED intervention in the market will fix our problems, you need to rediscover econ 101. after that, try reading Hayek.
Just a message to the Zero Hedge gang. You guys are so ahead of the curve here it's unbelievable. I been involved in this since I have been old enough to work for a living, 25+ years. Many thanks from a blue collar stiff.
Its a synthetic short squeeze. Stocks must be sold to Raise Cash/US Dollars.
Imagine a giant vacuum hose in search of dollars, in come dollars and out go euros. and stocks. What does everyone need now? Cash.
Gold is also highly sought after, most liquid.
Jeezus, where's Harry's Wanker ? Buy, buy, buy at rock solid support.
Ooopsie, that was 40 SP ago.
Dumbass.
I tried to tell him:>)
The truth is out...close your eyes & enjoy your ride
How is the Nasdaq going to be able to cancel these trades?
http://www.reuters.com/article/idUSTRE6456QB20100507
Did you ever want to know what it feels like during dazzling moments when lighting strikes?
Watch the entire PR effort. I enjoyed 16m to 34m. It really provided a visual experience of HFT.
Goldman Sachs - Heart & Focus
http://www.youtube.com/watch?v=3lIxJALaveQ
Enjoy. BTW, a donation is coming your way. We cannot have another server meltdown. Please email me ZH staff. Thank you.
All this shit has to be cleaned up but
they are not too smart,
they just like to have fun,
they don't like doing the dishes
so they never get done.
So I could have bought Sam Adams, Accenture, Centerpoint for zero cost at one point today? and Sothebeys was worth $100k a share...I have to put some real outrageously high sell price on my long stocks and short ETFs in case this happens again..
Except that NASDAQ decided to arbitrarily cancel all those orders
guess I'll go long on law firms...you know they will be filing first thing tomorrow am....and if they cancel your trade, you still porbably have to pay taxes on it
We who are about to die salute you!
Hey guys I think we have forgotten something. The BS I mean BLS job report tomrrow. I wouldnt be surprised if they are working right now to revise to a lower number. I predict the Bull shit net will say we have 9% unemployment.
The thing that is frightening is how the markets respond a year from now when the European swine flu contagion(PIIGS) spreads. I mean Greece cause the market to plunge like this. Imagine Italy,Ireland,Spain, Portugal, even the UK. I guess my grand parents are right. Never spend more you have to the point of no return. What happen today in Athen is waht will happen in the streets of America 15 years from now.
A lot of long margin calls tomorrow before 10:30am:>)
nono bad jobs report, the market tanks hard, and the wise guys buy, because weak jobs equals good news for corporate america. we hit a bottom tomorrow probably short of yesterdays low, and then buy it baby for all its worth
15 years or 15 months or 15 days?
NASDAQ canceling trades of stocks that varied more than 60% between 2:40 and 3:00???
Has this ever happened before??? Sounds like a cheesy sports book...
Uunbelievable!
A few times in recent years.An example here...
http://www.geek.com/articles/news/nasdaq-cancels-trades-after-google-share-price-falls-to-2850-2008101/
If you advance search google in the near three year range you'll find a few more.
This is just ridiculous. Die already stupid market. lets hope for a black friday or monday.
I didnt hear any whining when these fucking sigma-X/GS alogs squeezed the balls off the shorts for 15%.
I guess that it only matters when the cnbc shills get ripped to the downside.
I was just informed that the 25k dia I bot at 99+ "will be cancelled."
Frankly, I'm a little tired of this rigged casino.
That sucks.
They tried to screw me out some cash on a VXX trade, but supposedly they are going to pay me.
Citadel was the marlket maker that blew through a stop I had been raising at 2:22pm as vxx skyrocketed. They sold it in an area below where it hadn't traded since 10:00am. The broker said there were 1000s of bad trades that they needed to fix.
I didnt hear any whining when these fucking sigma-X/GS alogs squeezed the balls off the shorts for 15%.
I guess that it only matters when the cnbc shills get ripped to the downside.
I was just informed that the 25k dia I bot at 99+ "will be cancelled."
Frankly, I'm a little tired of this rigged casino.
I have been liquidating everything in my own account and family accounts for the past month with the last couple of small positions today...I couldn't help but laugh all day long at the market while simultaneously freaking out at my IT guy for not being able to troubleshoot my ZH feed! Big thanks TD and team for educating me over the past several months and keeping me out of this market.
good work...
it wasn't your IT guy. zh was gettin' hit pretty hard...
duplicate
Goldman Sachs does the most HFT on the exchanges. They could be sending a message to Washington to kill the reform bills or they will destroy the markets. These kinds of power plays have been used in the past.
Kind of like when Hank Paulson was telling Congress that the stock market would drop by thousands of points in a couple days and our economy would go back to the stone age, in order to get the stimulus bill passed?
So, do you think they brought Bernie Sanders into a room and said, watch this, watch we can do....and the market dropped a thousand til Bernie said okay, I'll compromise...
Mark Fisher on The Matrix Sell-off. "Its going to get worse."
http://www.cnbc.com/id/15840232?video=1487183693&play=1
HEY!
Now, boys, don't fight.....
Diversity!
Bob Dobbs is in I guess.
Zerohedge, we salute you. You have been a leader on the front of revolution. We are honored to have followed you this far, and we will continue to do so. We will do so in the face of a brain washed society.
"Do over." -Nasdaq
The Fed flexing nuts on Sanders and Co....Fat finger....The PPT flexing on Europe....Whatever.
All I know, is when this is said and done, gold will be on par with the Dow Jones.
I hope everyone is listening. I know anyone reading this is...well ok, cept for Hairy Douchebag.
If you have stepped away from Idull for the first time, and are new here, no worries.
Get some.....
Couldn't agree more. Great blog. Glad to part of this group.
A disturbing thought just crossed my mind....the majors have hundreds of billions of our tax doelarrs don't they? And the doelarr has value? What are they going to do with all that monie now? Give it back so we can spend it? Is this "their" plan? UGH.....
Time to retire for the evening. I'll leave you with a bit of financial insight.
Big Black - Bad Penny
http://www.youtube.com/watch?v=tjneXSsvc88&feature=related
http://www.cnbc.com/id/36999483
Mullshit!
You are bighty smug about your bental capacity.
We seem to have been shown today, among other things, that gold is in strong hands while APPL is not so much.
Apparently the "fat finger"---which CNBC is trying to pass off as on a single equity (Proctor and Gamble---how appropriate of a name!)---had under its thumb equities, the euro, cable, and JPY/USD, but not gold.
The longest journey begins with a single step. See you all at 666.
And isn't the internet a wonderful thing! When all the talking heads start saying "no one could have seen this coming", all we have to do is post a link.
I am sooooo relieved... knowing that we are forever one dipshit on a keyboard away from a market meltdown at any moment.
It looks like most of Asia is also suffering from Fat Finger Syndrome right now.
I am sooooo relieved... knowing that we are forever one dipshit on a keyboard away from a market meltdown at any moment.
It looks like most of Asia is also suffering from Fat Finger Syndrome right now.
Zerohedge! Don't ever ever ever do that to me again. I missed you so eventhough you were only down for a few hours. Don't you know you are the only truth squad? Masser and the dude were saying "how could this happen when the economy is improving and job numbers are improving...yawn..." wanting their guests to agree with their garbage. Then they were blaming some "rogue trader" that made an error. Wow. It certainly can't be the HFT computers that pays all those fat cat's salary's and vacation homes, could it?
The people of Greece were empowered today as they will take as much credit as people will give them. Look out below.
Donate! Link at top left of page. I kicked in today as well. Maybe they can scrape enough together to upgrade the servers. But, to be fair, other financial sites were down as well.
You just have to love these releases from one's broker & the names they cook up for the operation:
"Due to heightened volatility and market conditions that occurred earlier today, All equity exchanges have issued an Industry-wide Clearly Erroneous Ruling Policy Established for 05/06/10. An industry-wide decision to address potentially erroneous pricing from today's trading has been initiated.
Please Note that:
-The specific time frame addresses trade executions between 2:40 p.m. ET and 3:00 p.m. ET
-The reference price is the consolidated last sale at or before 2:40 p.m ET
-Trades executed with a price deviation of greater than and less than 60 percent from the reference price will be busted.
-This decision may not be appealed
Additionally, your account trades and balances may be affected as a result. More information will be made available to firms tomorrow with regard to trade executions. We will be modifying account positions and balances as the exchanges relay that information to us. These updates will most likely occur through the trading day on Friday 5/7/2010.
Should you believe that the your executions, that occurred on 5/6/2010, falls in the above categories, please contact the trade desk tomorrow morning before trading out of any erroneous positions as a result of the Clearly Erroneous Ruling Policy.
Updates will follow as soon, via your software as well as emails and notices, as they are made available from Exchanges and we will promptly communicate with you as soon as possible.
Thank you for your attention to this matter."
Well, they really drove a stake in the heart of retail investors today. This is the consummate joke of a free market. Well done, PTB... You have one helluva winning team in place.
Craziest thing I've ever seen. The trouble really started when the SnP futures were around 1140 and heavy selling came into the pit and the e-mini with goldman and jpm notable sellers in the big contract. We moved down to 1134, bounced quickly back to 1138 when big blocks went offer in the pit and continued to be refreshed as huge volume came into the e-mini. After we broke the 34 level, headed to 25 and made one final spirited push higher back to 1134 that failed, everyone capitulated, went offer into disapearing bids and unrelenting selling took us down to around 1111. After one last stand there we started the plummet and once 1195 broke it was the fastest move I've ever seen.
It moved so fast the candles on my chart couldnt keep up. The order book looked like swiss cheese with giant gaps of no orders and what was there was of no size, single digit size vs 500-2000 normally; it looked like it does when the market is closed in the 3:15-3:30 window, only worse. I tried to get a screen shot but it didnt work. At one point in the pit they had it 10 handles wide! At one point there wer no bids. Complete crazyness.
Fat-finger, technical glitch my ass. This was heavy selling after a mid-day bounce that cleaned out early shorts, brought on by riots in greece, a collapsing euro, a sky-rocketing yen, liquidation of risk trades etc etc. The fact that the 14wk tbill rate was falling all day was a giant warning sign. Once the selling really got started(coincidentally when goldman and jpm became big sellers in the pit) the programs kicked in, technical levels got breached and stop orders got hit. The market wasn't ready for this (all hail the recovery) and that's why it was possible.
Nice post.
Thank you for your perspective, please post here more often if you can.
fascinating first hand account. can you describe what happened on the way back up? it was almost as fast and actually recovered more than the drop. did you see anything (other than the lack of any bids at one point) to substantiate the theory put forth by another commenter that trading was stealth halted for 4 sec at the bottom?
I can't say anything about a stealth halt because at that point I had already walked away and went outside to have a smoke mumbling to myself, sick to my stomach, because I didn't pull the trigger on a short back at 1153, a trade that would have basically made my year. After we broke down well under 1100 the market basically fell into an abyss and it was hard to view it in any type of rational way. It was almost surreal. You spend years watching markets trade and in this one moment you basically are helpless and lost for any type of understanding. It's hard to explain.
Looking back at my data I don't see any type of indication that the market stopped trading, although we did get close to the lower limits and I'm amazed we didn't hit them.
The instant bounce back, imo, was simply from the fact that there were no sellers left and shorts were not being picky about price they covered at. When buyers came back into the pit(and the e-mini) they had to bid up agressively just to fill small orders because who was going to be selling in size after that? Everyone had basically stepped away from the market and was in a wait and see mode. Longs had been forced out and shorts now tried to cover into a relatively thin market, causing a very impressive bounce.
The fact that even for a few seconds there could be no bids what-so-ever...
SCARY!! For a short period of time there was no market at all!
Denniger nails it: http://market-ticker.denninger.net/archives/2282-Mr.-President-Unplug-th...
unplug the computers and we go back to the 1975 economy, which is where we are headed one way or the other
c'mon, read what he really said (and has said for years) NOT what you assume he said.
this was no better than the usual MSM/CNBC rubbish.
not your usual caliber - tough day - keep it all in gear.
Black holes man... massive black holes...alternate universes...filed with algos...working on behest of gods whim...the fall feels good at first...like a stretch in the morning...till bifurcation...begins.
http://www.youtube.com/watch?v=h1iJXOUMJpg
Skippy...as a half ass man with one white shoe, Ive been out for months. Stay and feel the effects of spaghettification.
PS. did you think your bought and payed for polies would hear you, really need you. There in and we are out, of the bond market that really counts.
Dont look now HAL 9000 has got em green...JPY 4 handles off highs RISK ON?!
Hey Bear
Wouldn't call risk on just yet...that yen green is due to the US markets, and not Asia.
Tokyo's been open 3 1/2 hours now, and the USDJPY is up maybe 65 pips. And that's AFTER a push-up attempt (1) by some major (which was immediately whittled down again). It's been drifting up at glacial speed, in wee nibbles, probably just a bit of profit-taking. EURUSD is the exact same story, with the exact same moves, at the exact same pace.
Biggest move of the morning - AUD dropped about 30 points on RBA statement, and is doing the same little drift up again for a net gain of about 40 pips or so since the market opened.
Well, that's my take on it anyway - I haven't even bothered to put in a small trade, and I've been looking for a good entry all morning.
I wouldn't call risk on yet - until the northern markets say it is. The big green moves up all happened on New York time!
Me, I'm not taking ANY position since I'm not even sure that the big markets are going to be open as usual...!!
ETA: Looks like a big wheel just tried the Big Green Candle approach again. Very subtle, same exact move on the EURUSD and USDJPY, already getting nibbled down. Nice try, bankster boy. Still not buying until the northern half of the globe buys first.
"In a related story, Homeland Security has begun rounding up all the butchers of the greater New York metropolitan area, and anyone else with a notoriously fat finger, and transporting them to Gitmo for interrogation. Commented one long time Brooklyn resident, 'I knew that Mario never gave me a full pound of ground round. Hope they waterboard the bum.' "
2 random questions -
1. Would/did ZH's RSS feed still operate even if browser access to the site is knocked down?
2. Does anyone notice anything significantly different about the SHAPE of the crater in GS share prices vs. all the other financials? Instead of the reverse exponential curve of slipping over a spherical ledge into vertical drop, GS price seems to have moved on a jagged, sharp but linear path from 2:10-2:15 or so, and reaching to nadir minute(s) before everyone else was plunging in a free-fall. GS stepped leisurely down the bottom $1.00 rung, and catapulted back up BUT A FEW MINUTES AFTER everyone else. Or am I just imagining all this?
Calls to mind the image of the homicidal maniac sprinting down at a slant on an embankment to the bottom of a gorge, cackling like mad. He makes it down in time to be able to look up and watch the victim plummet, screaming, flailing from the bridge/overpass above and go splat on the concrete. He rifles the corpse's pockets, jewelry, yanks multiple gold fillings in a millisecond -- then still holding the body, releases the pre-prepared bungee cord pulling them both back to the sidewalk on the bridge above.
The cops are on their way, but still out of eyesight. He adjusts his lapel, stashes the rubber cords in their self-contained briefcase. Headbutts the bridge railing, and collapses beside the victim -- lip slightly bleeding, but the taste of it ever so electric in his mouth. Regulatory efforts handled: check. Competitors, clients and general population dazed and intimidated: check. Several dozen multiples of usual daily profits booked: check. Plausible deniability: check. Life is grand when you're the flaming sword of the Lord's will.
CD,
I don't comment as often as I should, because I rarely have anything substantive to add. I do, however, want to say I'm really enjoying reading your ever-darkening musings!
MP
Thx. I really should leave this to those with more expertise, but who knows... 'See something, say something' and all that. God knows I have plenty of other stuff I should be doing, but the topic is both addictive and ominous. I may be way off base, but find 'coincidence' or any other equivalent explanations offered to be laughable. While watching the ticker this afternoon, I kept thinking of Robo's 'shank and crank' -- this was it on steroids and crystal meth, Hulked up and accelerated 10-100x.
I am really curious to see the spin put out on this tomorrow. The most likely outcome being the burial of the topic altogether under the next 'scandal/crisis du jour'.
See? Another cogent point, though indirect. Chiefly, it was our collective willingness to "leave this to those with more expertise" that put us on this paper-lined road to ruin. I think your see-something, say-something mantra belongs on one of Howard's t-shirts.
I find this stuff intoxicating in a Schadenfreudian (is that a word?) sort of way. I am not connected to the market in any fashion, I don't work in finance, I don't have a single penny of debt, and I purposefully found work outside the US way back in mid-2008. I now live in Malaysia and am really enjoying the show from over here. I don't plan on returning to American shores anytime soon.
Remember: just because you can't prove it's a conspiracy doesn't mean someone's not out to get you or your money...
Cheers
MP
Best. Market Commentary. Ever.
Thanks from a slasher-flick fan.
Its interesting that tomorrow's B(L)S report is almost forgetten now. Although today's action no doubt necessitates tens of thousands added to the Birth/Death pad-justment.
Look the chart of the brazillian stock market (IBOVESPA) for today:
http://finance.yahoo.com/q/bc?s=^BVSP&t=1d&l=on&z=m&q=l&c=
Just look what a "fat finger" in the U.S. can do to the brazillian market... Do you still trust the brazillian market?
I like the yahoo call:
They shoul sell the link to GS or JPM trading desks for a good price...
You REALLY don't expect the SEC to get involved especially when it cuts into their porn surfing time...do you?
Watching the CNBC talkers for the last 45 minutes or so. They still have the "fat finger" story as the cause. That has to be bullship. Absolute bullship. As others have noted, there is not going to be a $$billion trade on any exchange. doesn't it seem that they would be more clever than that?
On a different note, Santelli commented that today's lows would be hit again. He's kept his short outlook. The only sensible one of the bunch.
Now for some possible trade advice, probably too late to make it work. The Euro banks almost all have to be toast with the debt downgrades of the PIGS. Then their insurance company cousins and customers are going to suffer ffrom the "credit insurance" they've got out. Making those loans more shakey and maybe impossible to repay. They have not yet taken the MBS / CDO /CDS writeoffs from the US related problems yet. Hit them with another jolt and something has to freeze. Sure they are down, but when was it too late to short LEH?
So if I buy long GS, on the theory that they are short and will survive, what are the Euro names to short in finance using US markets? Is there some sort of Euro Bank / Finance ETF? I haven't found one.
ZH's 10k-hat call was vindicated again too, as it was in the money once more - no, twice more today.
Excellent work Tyler and thanks a lot ZH for giving us the truth.
we are proud of you guys, looking ZH news at every hour.
Thanks to everyone... Goldman Sachs, The SEC, Getco, Madoff, and all of you who tirelessly worked on overhauling the equity market structure. This is a huge improvement over the traditional structure where human beings were accountable for how stocks traded.
I'm with you. But aren't the specialists still there? I read quotes tonight from NYSE execs about how great their market is versus the electronic formats. But, where were they today when their stocks were tanking? Rhetorical question not meant for response. They were up to their old tricks, profiting while placing the blame at others.
the (bad) jobs report will give them the cover to buy futures, if i was a trader i would wait for the sell off tomorrow, and buy with both hands above yesterdays low, then sell half my positions when the position doubled, hopefully a few hours later, after Uncle Ben steps up to the table. they have all weekend to make news, after all, and if your'e short you have to sweat those mothers out.
I saw today's market dislocation killing my solars. Just check out these intra day charts:
I looked like this guy around 2:40 p.m.:
Leo
It takes a big man to admit when he's wrong;
a bigger man to laugh at that man;
and the biggest man of all to make 'em laugh deliberately.
Thanks for the giggle. :-) You'll recover one way or another - you're Greek!
Leo, its not too late to get on board with the junior golds. Other than shorting, its the only shot at making a buck. Check out DGC.TO, VEN.TO, TRR.V, VTR.TO, SQI.V, NGC.TO, and I guess all the GDXJ components.
Do we have to live with this bad data for rest of our lives? Draw graphs with this bad data?
When Nasdaq and others have cancelled bad trades why don't they cancel bad ticks across all data sources?
Who would fix the data?
I see QID has a low of 4.95? How and When did QID fall that low?
May 6, 2010 16.81 20.43 4.95 17.66
This is in no way a technical glitch if all the data providers are going to leave the data as is and use it for all their calculations like 52 week low to high % etc.
Has anyone at CNBC and company attempted to explain how "erroneous" P&G trades triggered the massive break in the FX markets back through time minutes earlier?
What a volatile day... markets swing a thousand, a friend from the way past calls out of the blue, and then Harry Reid turns briefly into Dirty Harry only to see the b(m)illionaires club turn it to business as usual.
Thank you zh!
I'd like to thank ZH and the crowd for all the insight. I've been here since almost the begining, I don't comment much but always lurking. What I am failing to understand is how collegues on my desk, market professionals, some of who I have a tremendous amount of respect for, cannot, or will not, see what the fuck is happening. Anyway, thanks again everybody. Hitting the tip jar on my way out.
Exactly! Ditto for everyone I work with - All market professionals who think I am the crazy one. 130 Jim Cramers.
ZH, Tyler et al keep up the outstanding, and I mean f-in OUTSTANDING work. I can see a day when you will be THE press. You're already the only press that matters.
I'm surprised no one has brought this up. The "fat finger" theory is completely invalid. To say someone hit the B instead of the M makes no sense at all. Trades are entered in shares, not dollars. These weren't mutual funds that were being traded, these were either stocks or futures depending on what story you care to follow. Both are traded in either shares or contracts, not dollars. In either case, even hitting an M on your keyboard would send the issue into a tailspin of epic proportions. PG or ACN or e-mini spoos couldn't handle 16 Million shares/contracts in one trade/day let alone 16 Billion.
This whole thing stinks to high heaven. My thought is that this was just a test and it makes me sick to my stomach to put on a conspiracy hat but it's the only thing that comes to mind given the geo-political situation we are in now.
I think it is a test, also. Glad to see someone say it.
I think it was all of the above:
Blackmail congress by flexing
Real reaction already in play with real Greece fire
And since it is happening anyway, study it carefully.
And here is one more for the tin hat-- I can't say specifically how, but condition the herd. get them inured to something or used to something. The humans left in the markets are addicts, junkies. Like the boiling frog metaphor, a junkie will get in deeper and deeper oblivious to risk, bad living conditions, stinking clothes, maybe one day rob someone or prostitute oneself. It is a gradual drift. More and more stuff that would have seemed outrageous and impossible at the beginning of the journey, becomes acceptable the deeper in the junkie gets.
Ms, if I can mix a couple of metaphors, I think it's not conspiracy-related in the least to suggest that the herd is, in fact, a colossal vat of frogs, being slow-poached for decades over the fires of civil liberty erosion, loss of privacy rights, lobbying organizations, wealth transfer, imbalanced and labyrinthine tax codes, government intrusion, and anything else that can be attributed to the imperfect nature of mankind.
The average citizen has been desensitized to so many repugnant, self-serving behaviors, just during my lifetime, that I'm going to be shocked, SHOCKED, to see any response from the herd that ranks above an apathetic, "so?"
I'm just grateful to you, and others, here at ZH, that have helped me stay clean and sober; it's nice not to drink the Kool-aid anymore. Way too much sugar.
MP
my fear is that even knowing, we end up going down with their ship.
"i bailed out *my* part of the Titanic"...
-- i.knoknot