DXZ Flash Crash Detonates Entire Currency Complex

Tyler Durden's picture

And now, for that Friday night bomb, when nuking stocks has a tad too much of a Waddell and Reed 'amateur hour' aftertaste, the only alternative - destroy the entire currency market. If this crash in the DXY (seen below) had happened during regular hours, apparently driven not by the dollar but by DXY component EUR (there was no comparable move in other USD pairs), it would have created a complete market collapse. Luckily it happened an hour after close. Weekend collapse averted. And a quick glance at the other pairs shows that the GBP and CHF were solidly impacted as well.

EURUSD:

EURCHF:

And apparently the crash metastasized to the GBP as well.

At this point, who really cares anymore?

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TheGoodDoctor's picture

Well with all these flash crashes it is hard to care about putting any money in the market.

Since I haven't done this before:

Gold Bitchez!

Silver x2 Bitchez!

Spitzer's picture

congrats on the first time doc.

TheGoodDoctor's picture

Is that what she said to you too Spitzer? Yow! (say it like Andrew Dice Clay)

PS Just messing with ya! :)

ATG's picture

Yes, Nice ICE not.

More to come Sunday?

-1Delta's picture

ICE not CME not FX...

luckylogger's picture

Did any of you guys have DX open at the time? I missed the 1st 15 seconds of the crash befor i could get my trade ladder opened. so I did not get to see the actual events leading up to this crash. However I used to trade TF all the time and have seen this action on ice several times. Here is my conspiracy theory :

one person or small group or big financial institution with all the money in the world, is greater than 90% of all bids on the future. Of course we as retail players only see 5-10 lines of bids and offers-- for enough money you can see all. Of course these are all fake and really make no difference to the retail guy. but if you know how many total their are and how many you have there... well duh !

So you are a big boy and find yourself in control of the bid side in something, so you start holding the bid up and quietly selling short. Remember all the other product have gone to bed or the bar so nobody is watching except for about 200 underwater retail guys.

Now you just pull the bid-- unreal the bid drops 2% in 2 seconds, aannot believe our good luck, now cover your shorts from all those freaking out retail players. give a couple dozen heart attacks out and head to the bar with your newfound riches.

-1Delta's picture

you can move alot of markets with the DX, as it is not really that liquid, but everybody watches is/ algos linked etc

High Plains Drifter's picture

Say it like the Dice man?   

what?

 

face down , ass up !!!!!

unum mountaineer's picture

That's what she said, That's what she said...HA!!!

espirit's picture

I think this is so cool!  Just think what the Dow would do during open market hours. It will blow a load.

French Frog's picture

c'mon let's get real: anyone who has traded currencies for any length of time will realise that there is no way that a dxy move like that would only be reflected in a miserly move in the euro (and the wrong way too); it's just a 'bad' print, that's all !

TheMonetaryRed's picture

Dear Doctor, 

We have colocated your gold. 

That is all. 

 

Yours as ever, 

Team Atari 

 

P.S. - Gold to $1700

eigenvalue's picture

Gold to $1700? When? You don't tell me that'll be 100 years later. This week PMs went through an utter bloodbath...

TheMonetaryRed's picture

Before March, possibly by January. 

We'll get some panic first. 

Unless.....

Nah, goldsters have at least until January. 

Spitzer's picture

I am still way up on my last 10 oz purchase on the last options expiration date of the summer douche bag.

I remember the so-called blood baths when the price went from 960 to 880 too.

So its not 1480 ? what a bloodbath,....

tmosley's picture

I know, right?  It gave up, like, two weeks of gains!  That must mean that it will never go up again.  It must, right?  

Right?

Hephasteus's picture

G20 vowed not to do currency devalutions. So they sold a few pounds of gold to make one last show.

RobotTrader's picture

Gold Bitchez?  Are you kidding?

If that thing crashed during COMEX hours, gold futures would have imploded by $200 in about 1 second.

And the overly-leveraged, F12 punching, momentum junkies with an outsized position to profit from a "dollar crash" would have immediately dumped GLD, SLV, GDX, etc. and would have flash crashed the entire sector.

tmosley's picture

Pfffft.

That's all I have to say to your ignorant comment.

unum mountaineer's picture

that guy robo...if/when that happens, there's blood on the streets...think about it..think..now take it back.

TheMonetaryRed's picture

Dear RoboTrader, 

All their base are belong to us. 

That is all. 

 

Your Friend,

Team Atari 

 

P.S. - Is that surge suppressor in pocket or are you happy?

P.P.S - For joke. 

rocker's picture

Don't you mean expolded. Let's be real now.

RobotTrader's picture

If I'm reading Tyler's chart correctly.....

It was the EUR/USD that crashed.  Not USD/EUR.

Any flash crash in EUR/USD would have sent all "risk assets" into the gutter, including stocks, commodity currencies, and gold.

tallystick's picture

Kinda like 9/19/08? Remember that day?

geminiRX's picture

I really enjoyed that month. Made a killing picking stuff up on the cheap....especially couer d'alene mines.

ATG's picture

Yes, 36 cents before the reverse 10:1 split

Spitzer's picture

Gold was up $25 during the flash crash, may 6 2010

hamurobby's picture

Yes, and you should have out of the money puts in something to cover your assets.

Hulk's picture

anticipating that...not leveraged, eventually USD will be the risk asset and the flight will be into hard PM's...patience, patience, patience...

ATG's picture

eventually

On a long enough timeline...

-1Delta's picture

Exactly. but the dx futures crashed. which is a risk on trade. Odly tho my fx screen did NOTHING, but UUP and UDN went retard. this was bullshit as ice cancelled all the trades (i bot at 74/75). so lame

 

flacon's picture

I trust FINVIZ more than I trust you. It was the US DOLLAR that crashed:

http://finviz.com/futures_charts.ashx?t=DX&p=m5

 

Arkadaba's picture

Flash crashing DX - damn missed it - Friday night and out for dinner - thanks for the chart.

Orly's picture

Sorry, y'all.  Two hundred pip, with turnaround in less than sixty seconds does not a "crash" make.  It makes for a bad tick.

That's it.

It's a friggin' M1 chart.  Hello?

tmosley's picture

What part of "flash" don't you understand?

The flash crash in stocks signaled people to get out of the equities markets.  What do you think a flash crash in dollars will do?

Spitzer's picture

No

Because the Euro has the nuclear option of colluding with the BIS to form a new physical only gold gold market. That would fuck the COMEX, the LBMA and the GLD all at the same time.

The ECB marks all of its gold holdings to market on the asset side of its balance sheet. They float the price of gold. Any time the gold price goes up, it is automatically built into the value of the Euro. As the dollar falls, the price of gold goes up, in other words, any fall in the dollar or rise in the gold price coincides exactly with an increase in value in the Euro.

In an event like this, the ECB/BIS would use the nuclear option and the dollar would be fucked to hell over night.

Orly's picture

It was a bad tick, okay?

Please save your "end 4X 4eva" conspiracy theories for when the Bank of England doesn't have a lot to lose with the end of the market.

Man, alive.

Spitzer's picture

i didnt say end for eva, robo did

Orly's picture

I know but I can't really understand the gold fever so many traders here believe in.  But to think that the international banking community would "fuck to hell" the USD overnight is just an absurd idea, don't you think so?

I mean, for real?  Let's just try a hypothetical reversal.  Let's say that the Fed and the Bank of England decided to crush the ruble overnight.  What would be the political backlash?  What would be the level international outrage?

What would be the point?

HomemadeLasagna's picture

When this cloudy title problem catches up with the trillions upon trillions of dollar-denominated derivitives that are based on said titles, it may well be the investment community rather than the banking community that will "fuck to hell" the USD overnight.  Once that train gets rolling, the first ones to jump out of the way are the ones that live.  And when that train gains some momentum, it'll be real hard to stop.  Any and all paper tied to the dollar gets tainted by association.

 

If you look out along the horizon, you can just make out the lights on the engine now...

Oh regional Indian's picture

Agree homemade. This complex is going to crumble under the weight of sentiment (read panic on main street).

If they try to legislate like they did in 2008 (financials short-ban et. al.), it will get even worse.

This time, the fuse is well and truly lit.

ORI

http://aadivaahan.wordpress.com

 

Crime of the Century's picture

Deja vu

I don't look at it as anything more than the shudder of a black cat.

High Plains Drifter's picture

Its a shame, that gold and silver supply and demand issues play second fiddle to the bogus leveraged paper gold and silver market. With leverage stated at perhaps 100 times , the whole thing is corrupt and disgusting. Time is all its going to take to fix this broken market and we the people will do it. One might ask just how much gold and silver bullion do these fishy ETF's really have in their vaults, not to mention the COMEX , etc. The whole thing is rigged but it is about to fly apart , burdened by its own deceit. This is a good thing. We await this event and will smile when it does happen. It has been long coming and is long overdue.

Spitzer's picture

gold did not break an all time high this week !!!

Blood bath alert!!!!!

I am still $40 ahead on a purchase a month ago for cock sucking fuck sake.