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Entire Market Rally Engineered On Volume Fumes
For those who doubt the validity of the market rally, the chart below should justify their concern. The entire rally, commencing with the test of 1,000 in ES a week ago, through today has occurred on irrelevant volume. Compare the accumulation volume in the downward channel from 1,120 through July 5, and then compare to the volume on the upswing which has cut more than half the drop's losses. And somehow the shorts get scared to cover all positions in this manipulated no-volume rally.
And another way to demonstrate today's ghastly market participation, only April 5 and 6, and the first week of January posted lower volume than the broad ETF did today.
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i loved the stat on here last week that cancels-to-executions are 40:1 on the nasdaq nowadays... and relative to only a few years back, the ratio was at 10:1. amazing what "you" can do when activity is light.
curious if this is the new world of domestic equity markets: irrational hilarity.
I bought some SH today....expect market rally of at least 3% tomorrow! 10% up by the end of the week. I'm the best contrarian indicator out there.....
The boost in AA was impressive if purchased before July 4th weekend. The guidence was positive, based on, well I am really not sure, perhaps optimism. Seriously, it was Y on Y growth which is not really saying a lot.
Anyway this should help the market marginally rally into the financials on Friday.
Mark Beck
so can anyone verify that stat- it is just hard to believe... but if it is true "irrational hilarity" would be correct
ZH had a guest post Friday that included data from a study by Knight Capital Group, including info on cancellation rates past and present. Probably the source of the stat, although the article mentions a 30:1 canx rate. Link to the full Knight report imbedded in the post.
http://www.zerohedge.com/article/guest-post-major-structural-changes-us-equity-markets-you-must-know
Yup...Looks like a ramp up based upon unicorn farts and leprecauhn tears
No lift.
Unpowered controlled descent. This thing can glide a short ways but it cannot fly.
It's going down, even when it's going up, because it has no engines. Those fell off around 2001.
Shorts are only afraid of the FED intervention to prop up the markets, otherwise we would be at DOW 5k by now. When the shorts finally get that one piece that crushes anything the FED can say or do, then they will pile on like a fly on dog shit. Everyone knows the market is a fake entity, even the bulls(really stock pumpers) know it. Its just a matter of time before it all falls down.
++
I am forced to watch CNBC because my digital cable box is broken and even the pit traders they get on there say they're waiting for this rally to fizzle out so they can reload their shorts.
It doesn't really work like that.
If everyone shorts @ 10,000 and cover at 5,000 the market will probably go right back to 9,000 (you have to buy the stock back) and some people will actually sell.
well said
Except for a brief 21 minute period between 9:45 and 10:07, breadth was negative all day. And yet, positive close.
Curious
The coming mid-July inflection point on this chart is going to look just like the mid-June inflection point.
Th only difference is that the next stopping point on the ES is down around 900.
Obama says: "PPT: Just prop up the US equities until Nov 4th..."
Most everyone here is probably much smarter than me, so pardon my ignorance with this question:
If you believe in a Plunge Protection Team and their ability to prop up the market, how do you account for the crash in 2008, right before the elections?
It was the best way to scatter the masses into fear enough to elect their man Obamam
What? So the PPT is controlled by Democrats only? The Republicans must be very angry at this people!
I got to be honest with you, that sounds remarkably goofy.
There are no Democrats or Republicans in control, just Oligarchs.
Might be goofy and its best to stay away from anything which has "they" as being responsible...but, let's face it, this market is just downright strange. Even to the fairly uninstructed, such as myself, I can't see any reason for it to rise, at all. The economy sucks! And I mean, like really, really bad. But the S&P goes up?
I don't get it - it doesn't make any sense at all.
How much money were they able to steal with that antic? Extortion I think they call it. The PPT is great with low volume, high volume they use blackmail.
Two trillion, seven hundred billion. Give or take.
Oh Quato, do tell.
The crash of 2008 occurred because no PPT can stop a bank run. Just because the markets crashed didn't mean the PPT didn't try to do their thing. If everyone right now said FU to every bank in the US, the financial industry would cease to exist - PPT action or not. As for "right before the elections" part.. I'd put that under unfortunate timing for whoever was in charge during that time because they couldn't keep up the ponzi scheme long enough.
PS - I am not smarter than you. I am dumber. I am Homer. Doh!
@homersimpson or anyone else
Please allow me to play the devil's advocate for the moment. I'm only trying to add some clarity to a very suspicious topic.
You say that the PPT cannot prevent a bank run, but the bank run in 2008 didn't happen until the third week of September. The markets, though, had been deteriorating the entire year.
Why would the Plunge Protection Team allow the markets to deteriorate so badly throughout the entire year? If there was ever a time when the PPT should have been manipulating the market, it would have been the entire year of 2008, when the stakes were so high. Unfortunately, I see no evidence of it whatsoever.
Sometimes it appears that the PPT is just a convenient conspiracy to explain market movements that are not readily understandable.
The supposed existence of a PPT has gained notoriety in the past 12 months - thanks largely to ZeroHedge. In 2008, no one spoke of it. Why? Because the market moved in a direction that matched everyone's perception. Over the past year, though, the market has often defied popular consensus. It moved up while everyone was looking down - wasn't the world suppose to have been turned to ashes by now? Blaming a market ghost (like the PPT) seemed more reasonable than admitting your thesis was wrong, or your trades where facing the wrong direction.
Furthermore, if the equity markets are dominated by algorithmic supercomputers, it seems reasonable to me that these computers have the ability to move the market in whatever direction they want to unload their inventory (long or short) at a profit. Operating in a near vacuum, these algorithms can jerk the market on a dime, leading some people to stare in disbelief and conjure images of ghosts/gods with their fingers on the "buy" button.
Does that make any sense? The existence of a PPT seems like a red herring, distracting one from reality. Although I will admit, it's fantastic for cocktail conversations.
The PPT is brought into play when conditions are right. If things are significantly "out of whack" and the market needs a helping hand, expect the PPT. The PPT is there to provide a base and make a ton of money for the people of the United States. I think everyone understands the concept of buying when blood is running in the streets.
I suspect the PPT took a break, starting April. With the oligarchs and the government controlling the big banks and the financial system, why would they want to kill the golden goose and allow the market to crash? The flash crash was a shot across the bow. The oligarchs need a somewhat healthy economy in order to prosper. Burn everyone and your shares in xyz are just paper.
The oligarchs lose if the market dries up. The big players who short the market are nimble. They understand that "low market volumes" are not their friend. If the market were to crash, expect new tax legislation to re-aquire the "ill-gotten gains of the short sellers/market manipulators".
The logical conclusion to all of this is a low volume melt-up. I don't think anyone is too concerned about the little guy, certainly the little guy who is shorting this market.
Cui bono?
Plunge protection is a nickname for the President’s Working Group on Financial Markets…and in one way it’s a misnomer. That’s because the actual wording and authorization in the Executive Order allows management of the equity markets, which can mean sell as well as buy. IOW, for the good of the TBTFs (sold to the public as obstensibly good for the health of the markets), a managed selloff can be both politically valuable and surprisingly beneficial to the oligarchs. The act says it is to keep the market orderly and efficient.
And after the October 2008 crash, when all was said done, guess who the insolvents were who profited from the bailouts? Goldman J. Sachs and the TBTFs. The name of the Fed’s game is bailout on behalf of the banking cartel—prosperity through insolvency.
The idea of bailout was sold on the basis that we needed to save the biggest players who were in trouble or the financial system would colllapes. Goldman got it’s bailout and became a bank holding company. And in order to make it look good, the Fed forced the banks that were healthy to take bailouts.
Paulson gave the performance of his life, pleading on his knees before Barney Frank for a bailout rescue for the oligarchs. Such a performance would not have been successful in a general bull market. A selloff not only made the bailouts for Goldman and others an easier sell to Congress but after the slide, with bailout money coming, the investment bankers could go on a major shopping spree with taxpayer money at bargain prices. They engineered the outcomes
Why did it happen before the 2008 election? It was obvious that the oligarchs wanted to make the bailouts bipartisan. They wanted to start them on the end of Bush’s terms and finish them on the beginning of Obama’s term. And since Bob Rubin and people like him control both sides of the aisle, they were able to have Paulson--Bush’s man--plead the case and get the Republican leadership to lead the charge for bailout. And then, after the election, when Obama came in, he immediately, in his first few hours, says he agrees with the bailouts. And pushes for it. Why did he do that? Because the Power Elite told him to. And guess what happens when Obama comes in? The Democrats come in with him and take over the committees. The bailouts had to be bypartisin.
And another meltdown becomes a win-win for Goldman.
As for the PPT, the TBTFs lie and cheat and steal and kill so they can get this kind of power; it isn’t so they can be good citizens so the US can have an orderly system of government. It’s no different from the Watts Riots with the looters going up and down the street breaking windows and stealing televisions. The oligarchs want that chance to steal; that’s why they go through all this rigmarole. Paulson isn’t some kind of James Madison. George Washington, throughout the entire revolutionary war, did not take a salary; all he did was very carefully write out his expenses. That’s not who these people are.
Well said. During the fall of 2008, I had the sense that the downturn was being driven in part to provide incentive/cover to members of Congress to pass the bailout. And of course, the flash crash occurred on the same day as Congress was debating Brown-Kaufman, one of the few proposed amendments that had real substance, and addressed some causes - not symptoms. I heard but never verified that the crash occurred during the debate. If true, it's quite the "coincidence".
Hank Paulson himself is the one who re-energized the President's working commission on... (the PPT). I think they didn't use it much during early 2000s, and it went idle for a time. but 2008 brought it back with force. Now it's be retooled and unleashed.
And, is that avatar a picture of you?
What a good observation regarding the PPT!
As for my avatar, I’m working on it… Is Tyler Durden taken?
And then Proactively Trash it, so the Administration can nationalize Everything at cheaper prices to make everybody feel better about nationalizing the stuff cause it wasn't worth anything, any more, anyhow at them new and lower prices. Sorta like my neighbor's home that I'm paying for.
Just wanted to point out the gigantic, hypervolume green shoots happening in the last minute of every single index in the last couple of minutes of trading, every single day, for the vast majority of days, for as long as I care to remember. Literally 70% of the entire volume for the NASDAQ today was in the last 3 minutes. I realize this is obvious to most ZH'ers, but in the event that we have some new folks reading this, look at volume, and note the gigantic green shoot at the end of the day. It's important to realize this, and then take the appropriate action.
Gigantic Green Shoots, just what we's been Promised, by Golly!.
Markets, in their most basic sense are the collective expressions of all human emotions: fear, greed, hope and aspiration...
For the last 12 to 15 years, there has been a deliberate and methodical effort underway to remove the human impact of emotional decision making from the marketplace in equities. The rationale was that emotions killed profits, so it was much better to relinquish all key decisions to the elegance of mathematics. Statistical algorithms would establish a "purer" reflection of actual value of the companies: price discovery absent human emotion.
Well, boy genius, you got what you wanted. A market based on complex computer code, disassociated from carbon-based forms of common sense.
I don't play there anymore -- have fun playing with yourself.
Not sure how long you have been trading but I don't see anything new under the sun. They used to circle wagons around stock in the early 20th century on a regular basis. Boy, was there tons of manipulation.
I happen to follow EWT (I know most of you don't) and thus far everything is falling into place quite nicely. Why? Because EWT always accounted for manipulation - reason being that the end result is only slightly shifted. You cannot move the finish line - you can only change the path that leads to it.
Jeezzz - guys - stop bitching! You can't argue with the tape - just see it for what it is: A bear squeeze ahead of a drop into the abyss. You should welcome this as an opportunity to get positioned.
Finally, NYSE A/D ratio was actually bearish today at 0.57 (D/A 1.76) - I'm considering this an X-mas present quite frankly. Everyone please quit bitching and instead focus your energy on buying puts or shorting or whatever will get you a piece of the action.
What I'm seeing is very typical of a 2nd wave reversal in EWT terms - if you don't believe in that then check out various examples of H&S resolutions - that first fake out move down followed by a ramp up is almost textbook:
http://thepatternsite.com/hst.html
Anyway, there is more and you guys know where to find me.
My piece of the action is another ounce of gold and another roll of silver Eagles.
Thank you very much!
+10, I agree, this is a nice setup for the inevitable next leg down. BTW, I enjoy your posts at your other site.
Even the HFTs went on vacation.
"And somehow the shorts get scared to cover all positions in this manipulated no-volume rally."
Not all of them did.
Me thinks if the shorts only read ZH they will never cover until the pain is so great at 11000 aagain.. right at the top.. Last july we did the same thing.. no volume that was complained about every day and people kept shorts and the market went straight up... look out above
Here comes the flurry of higher than expectation earnings. Bears get out of the way for the oncoming rally!
Meanwhile, Rolls, Ferrari and MErcedes all had their best halves in sales, US sales up 22% for Mercedes and triple the number of Rolls sold last year, and deliveries in June four times higher than normal.
See, Nancy was right, "Unemployment checks are the best form of economic stimulus." Mathematically, a statistically significant correlation, by Golly, and numbers don't lie!
I feel a real scrotum squeezer coming on. Get the popcorn ready, Mildred!
Go figure , the rich are bolting the mortgage payment and leasing a Rolls.
Property values down 31% in Beverly Hills 90210. And 1 in 7 million dollar McMansions are now delinquent. All hat and no cattle.
www.doctorhousingbubble.com
Bounce from 102(SPY) on decling volume. Closing in on downtrend from highs, tomorrow gap up open on nothing followed by close below 107. my best guess
Wow ... what a guess ... if it comes true I'm a fan for life.
Going to pick up some TNA seeing as how this will be another false up summer. Yay for irrationality!
Oddly enough, TNA was down on this "up" day, and its inverse, TZA, was up on the day. Buying must be concentrated in a few hundred large-caps. (I wonder who would be doing that? :-)
After hours, TNA/TZA each have retraced about half their move. Does indeed look like a gap up tomorrow morning.
truth is.. Last July we did the same thing on VAPOR.. 1000 dow points .. a rally is still a rally just keep the stops tight.
Without emotion, decision making would be damn near impossible. Endless analysis - paralysis by analysis. Emotion provides the nudge to Buridan's donkey...
Stops don't work so good on low liquidity. Puts are better.
Nothing to add, just thanks to ZH for showing once again that the emperor has no clothes!
Another PPT moment was the last "Black *day" way back in the 90's maybe? This is a well documented group within the last few Administrations anyway.
I agree 100% PPT is used as an excuse way too often. But it's real. Are there entities manipulating this market that are not the PPT? Maybe. Maybe not. Is the PPT doing daily market operations? Maybe. Maybe not. It's a waste of energy beyond maybe/maybe not for me. YMMV.
Somethings sure are strange about the way this market moves though.
We are on the edge of a cliff. Not sure how deep that chasm is, but we are going to slide down very soon. Got Puts?
Don't short a dull market.
Were have I heard that before
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