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DXZ Flash Crash Detonates Entire Currency Complex
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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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!
congrats on the first time doc.
Is that what she said to you too Spitzer? Yow! (say it like Andrew Dice Clay)
PS Just messing with ya! :)
Thanks Tyler!
http://finviz.com/futures_charts.ashx?t=DX&p=m5
Yes, Nice ICE not.
More to come Sunday?
ICE not CME not FX...
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.
you can move alot of markets with the DX, as it is not really that liquid, but everybody watches is/ algos linked etc
Say it like the Dice man?
what?
face down , ass up !!!!!
That's what she said, That's what she said...HA!!!
I think this is so cool! Just think what the Dow would do during open market hours. It will blow a load.
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 !
Dear Doctor,
We have colocated your gold.
That is all.
Yours as ever,
Team Atari
P.S. - Gold to $1700
P.P.S. - http://www.zerohedge.com/forum/hft-comes-gold-market
Gold to $1700? When? You don't tell me that'll be 100 years later. This week PMs went through an utter bloodbath...
Before March, possibly by January.
We'll get some panic first.
Unless.....
Nah, goldsters have at least until January.
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,....
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?
G20 vowed not to do currency devalutions. So they sold a few pounds of gold to make one last show.
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.
Pfffft.
That's all I have to say to your ignorant comment.
that guy robo...if/when that happens, there's blood on the streets...think about it..think..now take it back.
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.
+10 LMAO!!
Don't you mean expolded. Let's be real now.
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.
Kinda like 9/19/08? Remember that day?
I really enjoyed that month. Made a killing picking stuff up on the cheap....especially couer d'alene mines.
Yes, 36 cents before the reverse 10:1 split
Gold was up $25 during the flash crash, may 6 2010
Think Not !!!
Yes, and you should have out of the money puts in something to cover your assets.
anticipating that...not leveraged, eventually USD will be the risk asset and the flight will be into hard PM's...patience, patience, patience...
eventually
On a long enough timeline...
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
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
Flash crashing DX - damn missed it - Friday night and out for dinner - thanks for the chart.
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?
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?
The dollar is not looking good in the futures market right now
http://clearstation.etrade.com/cgi-bin/bbs?post_id=9331973&usernm=wndysrf
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.
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.
i didnt say end for eva, robo did
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?
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...
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
I don't look at it as anything more than the shudder of a black cat.
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.
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.
About 9 Happy Meals.
At least his are happy...
x 10
@RobotT
They flash crash the price of gold $200 like you say, the physical gold will disappear as fast as your lightening strike!
The VALUE of physical gold will not change because of HFT manipulation. Of course, I am talking of gold holders (strong hands) not speculators... I have always had bad luck speculating.
Silver supplies are already drying up. It's looking a lot like 2008, but without the big price decline.
I'll be keeping some dry powder should I be able to pick up some more silver on the cheap, but I'm not betting on it.
Don't trade futures. Buy and hold the physical item. They can flash crash all they want - you'll stay intact.
Ridiculous. A dollar crash does not make gold drop. Gold would have popped $200 not dropped.
Actually 100% inaccurate. As usual.
Uh Huh, and if it STAYED that way, all you paper whores would have is a bloody ass, and maybe some FRN's to wipe with.
Gold (physical) will be $2000.00 by END of next year.
Pull back to 1260/1300, and watch the pile in.
The Indians,and Asians,SK's,Chinese,are on autoejaculation at the thought of it under $1300.00.......
Watch the train wreck.............these "Little Flash Crashes", are a message for those who KNOW they are going to go down, and STAY, wake up!!!!!!!!!.
Damn, gotta draw you a map bro?.
It's your FRN's,exchange at least SOME while the fools are still giving your real money.
Anyone know how to find out if an IRA physical gold trustee is actually trustworthy? Are there ratings for them somewhere?
If you drop it on your toe, and it doesn't hurt, don't trust it.
With IRA money, you dont have the option of holding it yourself.
It's OK, they may be coming for all our IRA's and 401K's soon anyway.
All your retirements are belong to US
Cprrect. the FED bagman, the IRS wants to get their pound of flesh when the IRA "owner" wants to get his gold which probably isn't there anyway.
You answered your own question. Evaluate your options for withdrawing it. Taxes will probably be higher in the future, so tax deferment is not the benefit it ought to be.
That would take a mighty large stack of paper goled
Trust me. +++AAA+++
Only one's I would trust are BullionVault,Perth Mint, and make DAMN sure it's stored in Zurich, not London.Or in Perths case, Aussieland.
Holy CHIT!
You are a Doctor, and you are good.
Great time to be buying gold & silver.
I'll wait til after the 30% correction.
The 30% correction after it hits $2500, or the 30% correction after it hits $4000?
thankfully the ETF marketplace for currency hedging isn't the "true" marketplace for currencies. there's going to be some errors in the ETF marketplace ssince it's not yet a perfect science, but relative to the fee involved in trading thee currencies in a FX account, the ETF stuff is brilliant. 99.999999 percent of the time the system works pretty well. living your entire life looking for the "tail risk" you could be waiting 50+ years to see your ship come in, and by that time all of your buddies will be selling their yachts.
thank you
No doubt it's really a great article and I felt really great going through your blog post. Great to read more articles from your side.
dual saw
A look at the future, maybe? Or as someone lovely I knew called things like that, a forerunner of what may come to pass.
Dear RoRo,
When you ask the future, we already bid.
When you bid the future, we already ask.
That is all,
Team Atari
Fake.......junk it.
Looks like the markets are getting a little tipsy on Ben Shalom's super strong koolaid. Oh well, we all slip now again...but then again I remember we also seem more probable to collaspe in a stupor after we'd slipped. MMmmm, nevermind party on dudes!
Forget koolaid--this can only be brough on by Tang.
putang?
I am personally convinced nothing will change in this market until something big happens to make everyone wake up and demand change.
I shouldn't pick on you, really I shouldn't, but your comment has this innocence about it that makes me want to crush it to bits under my heel, for your own good, our own good.
We are awake. We are demanding change. They are not doing shit. They don't care about what you and I demand. They don't have to listen to us at all because no one is enforing the rules. They laugh at us in all likelihood because they have control of the apparatus and you and I do not. Bitch all you like. Complain and demand until you are blue in the face. They don't care.
Now what, sweetheart? Take it to the next place. Now what?
Tyler does not like it nor does the highly leveraged shallow pocket crowd but it does re-balance via shakeout.
The only thing wrong with that is an assumption that most trading dummies have; "you have privacy on the Internet". All of your trades and all your stops are visible to those who seek to see them.
The Internet is the worlds first all-in party line. Back in the 50's to 80's you could ask a phone operator to connect you to a party line and you could participate in open conversations. All participants had no expectation of privacy.
The Internet is THE manifestation of this without knowledge or consent of most participants. And to an equal extent so are your cell phones. You put all your business out in the wild and "people are listening".
If you ban algorithmic trading the same result can be achieved with a 1000 traders in a boiler room phoning in the trades.
The real problem is how and where did the information come from that triggered the trades? Once you understand this you will realize that you will never be able to change it.
The myth of Pandora's box is embodied in the net, and certainly in the trading mechanisms, is what I hear you saying. Or if you like, there is no putting the genie back in the bottle.
This is a force so powerful, that there is nothing to be done? As long as there are computers there will be no regulation and enforcement because it is evolving too fast and the learning curve is too steep to ever catch up to what is possible? There is a term for this that sociologists use called the "tragedy of culture." The cultural products out pace the ability of the individual participants to master them, thus they become mastered by them.
Talk about the ultimate in anti-conspiracy theories. We are all already dead. Same as it ever was I guess. Do we then just accept what has happened and just move on with our individual lives and do nothing to try to address the situation, because we can't? I know all I feel I have any power over is what happens locally, immediately around me, but that premise is really hard for me to accept.
MsC, in a fractal world (as it is) I would aver that the only power you have is over yourself.
On everything else, you merely exert influence.
I think that the re-cognition of that would be good for all of us.
It's inner work time...
ORI
http://aadivaahan.wordpress.com
Yeah. And that dude uses stops.
lol
"This is a force so powerful, that there is nothing to be done?"
Well not necessarily. If you look at companies like Corning Cable Systems you will understand why they are doing so well. They make fiber optic(FO) cable.
Some organizations run their own FO cables directly to the exchanges. Using something called quantum cryptography, you can guarantee a pipeline that cannot be eavesdropped upon.
http://en.wikipedia.org/wiki/Quantum_cryptography
http://www.printerinks.com/Quantum-Cryptography-Basics.html
Some say not, but in practice once a photon is "listened" to by an eavesdropper it's physical properties change and those changes are detectable.
http://www.nature.com/nphoton/journal/v4/n10/full/nphoton.2010.214.html
Expensive yes. Technical yes and if not setup correctly it can be hacked. But if done correctly it works.
Do the millions of daytraders like Tyler's favorite The Cilantro Fund, have direct fiber? No, they use AOL to connect to Scottrade, CharleySchwabb, or ThinkOrSwim. AOL sniffs their pipelines and finds all the daytraders positions, and watches their research, etc... and offer it all for sale to the highest bidder. Scottrade and TOS, etc... sell their customers data to aggregators who sell it to the algo's.
It's just business, read the contract with your ISP and trading platform. The daytraders allow it to happen. It's hard to stop ignorance that is magnified by greed.
I suggest taking some introductory computer science classes before posting again.
Your comments reflect my sentiments thus I do not understand your frustration. A lot of people have made their frustrations known to bureaucrats but nothing seems to radically change. Short of a true revolution of some form what will change today? This is my premise in that once something "blows" to destroy the current system we will have no choice but to build a new one.
I probably owe you an apology. See discussion above us. Even as I was trying to so called "wake" you up, I got served my own "wake-up" call.
Peace
MsCreant,
a tad OT, but the perfect segue into the SS/MC fiasco playing out.
The same rules apply.WE have NO SAY.
And if we did,who gives a squat?.
40-70% of Americans did not want the major legislation that was RAMMED down our throats, we yelled, we screamed, we marched, we called, we wrote, we emailed, SO WHAT!.
THEY, as you put it so eloquently, do not give a shit.
this is the end of paper money. commodities, here i come!
paper commodities?
I think he meant,
paper commodeities
Just in time for that G20 meeting. Hilarious:)
Then it's the Gee20 meeting.
Baracks friend Mr. Soros is out exercising his shiny new algo just in time for G20 "negotiations".
If my stops were taken out to the forest but no one was there for the other side of the trade, would I still get rich?
/:
no, just as the man, you'd be fubar. - Ned
Dxy to 100
C'mon let's go
Bens dead fall would have filled you.
ya it was weird- all my trades (all 55 long DXZ10 at 74/75) canceled. bullshit.
i still dont know who/what the hell was selling down there.
what is scary is that the dx (relatively illiquid relative to FX or even CME currency FX) can move the entire market with 400 cars....
Dear Everyone,
We have co-located your money.
That is all.
Yours As Ever,
Team Atari.
P.S. - We win.
Tyler
Many people including myself are more into the macro end of things so we have not been paying attention to these flash jobs on say apple but....
How can this happen in the currency space ?
the dx is pretty much illiquid- its not FX or CME futures- it is ICE
Via ... A bad print.
Move along. Nothing to see here.
Ahh....its just super-computers fondling each others silicon bits.
That made me discharge my capacitor.
And made my inductor oscillate wildly!
Maybe these flash crashes are an algo making some large hedged bet in minutes. These hyperbolic moves could be to just cover it's tracks.
I don't know this doesn't make sense. Why would it drop like that and recover in that time frame? What was that, like 30 minutes? I'm not a my work station.
These are currencies we are talking here.
Why that move, in that time frame, at this point in time, with this currency?
Maybe other countries algo's are trying to scalp one another.
Currency war B****ezzz!
What if it was done on purpose to show the world that someone has a huge influence, and are not afraid to use it to get what they want.
Tin Foil Hat firmly buckled,
What if (what IF), they are using these to SCAM the system, rake off massive profits, and use the proceeds for more QE support, or lining someones pockets?.
Only the HFT Masters have the power to start, and stop....and do not tell me there is no manual joystick.
All organized for the G-20 circle jerk meeting
A rehash of prior meeting to July meeting to present.
Progress report on the economic and financial actions of the previous G20 Summits, July 20, 2010
http://www.g20.org/Documents2010/07/July_2010_G20_Progress_Grid.pdf
Circle Fucking Jerks just putting on another dog & pony show for the masses to view thru the daily teleprompter news.
G-20 Milestones completed = None. Media will report 'Better than expected'
Any doubt Turbo Tax Geithner is playing currency war games?
I wonder if he will get food poisoning while there?
Maxwell Smart to the Chief: "Missed it by that much."
http://www.youtube.com/watch?v=oPwrodxghrw
I remember one commentator on ZH drawing rather provocative fictional lines from a previously legislative proximate flash crash in stocks.
Hmmmmm....FC in FX space hurting "nothing" proximate to (or shall we say demo for) G20 crowd?
/nah, couldn't be/
You mean this?
http://www.zerohedge.com/article/call-%E2%80%93-fictional-look-25-minute-market-crash
Currency flash crash?
Money isn't everything and soon it may be nothing at all.
~ Cursive
Bank failure Friday update, 7 banks down. hit to FDIC $476 million
A better than expected 7 banks failures occured on Friday...
http://img594.imageshack.us/img594/5716/bankfailure0910.png
Seven banks closed tonight by the FDIC. Possible link to flash crash? Bank holiday may come before the election.
I hope not. That would not be good. Would they still hold the elections? Boy that sure would cock block the tea party.
no i think that would probably anger the tea party activists even more...which probably would be good i would think as for the so called "tea party candidates"....please, there is no difference in any of the tea party candidates(except maybe rand paul) from the neocons and the establishment conservatives.
Hey c'mon man. A guy can dream about viable third party candidates can't he? I am so sick of the two party rhetoric!
Dupe.
Zon,
'Bro,with all due respect, you are SO far off right it's hilarious.
Not saying IN TIME they won't become LIKE them, but we are seeing so many PARADIGM shifts of late,nothing can be discarded.
Bank holiday before election?.Yeah, that MIGHT stop the election, and kick off a second Civil War.
And, I am not joking, we are sitting on not just a financial , fiscal powder keg here.
Double post/
Someone correct me if I am wrong.
Don't all things that "flash crash" go up singnificantly after they flash crash?
Doesn't matter. It doesn't even matter who shorted it or who went long. What matters is the magical Keynesian word "CONFIDENCE".
What are you a comedian? you probably should be as that is some serious funny observational humour Bob.
relocated
NOT SO CIVAL DISOBEDIANCE YOU FUKS!
Tel hukt on fonix to giv yur muny bek (and buy a new keyboard with working shift/caps lock keys, 'fer fuks zake').
ok snowball you are right..i am so sorry. forgive me for showing any anger...i am ball-less. but if you are ever in a cross walk and I miss the brake pedal do not be suprised oppss....i missy brakey pedalin der yugo ooofuk.
f off.
you'll miss the brake because you collapse into the handlebars from acute lead poisoning (but I'm sure you wouldn't miss the pedals on your bike otherwise).
Audi RS8, thanks for playing.
Is he French, or Greek?.
Dollar is going up!
In smoke?
Like poof!
US reserve currency will be saved. Obama has an idea to combat mounting debt saturation.
Obama launches effort to develop jet fuel from plantshttp://content.usatoday.com/communities/greenhouse/post/2010/10/obama-biofuels-crop-payments/1
You realise, he borrowed the idea from DARPA. I can only imagation his thought to tax all lakes in US. A new Government revenue stream is born.
US military to make jet fuel from algaeFebruary 16, 2010 by Lin Edwards
http://www.physorg.com/news185521814.html
Obama is a genuis, not.
Why not legalize hemp which is far more versatile than petroleum and far less toxic to the planet. I'm posting from blackberry or else wpuld include links but its an option I NEVER see anyone mention. Plus it is renewable!
The stems are useful for lots of things, but what would they do with all those leaves?
compost?
Brownies first, then compost...
You harvest after the seeds have fallen of to the ground. That way you don't need a shitload of fossil based fertilizers... Aditionally, you didn't need pesticides when growing them.
It would be really interesting if someone could find a good way to use the oil from the hemp seeds in an engine. About half the plants weight are in the seeds.