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Europe Opens With A Mini Flash Crash

Tyler Durden's picture




 

No volume, deranged computers, and a rate hike: Europe's mini flash crash refutes the market's "welcoming"
of liquidity withdrawal to Goldman's now traditional embarrassment.

Dax futures...

...and IBEX futures

From Serenity Markets:

An extremely nervous market drops hard and I fear that this morning we saw another mini flash-crash. The low volume of Christmas, compounded by
the closed London market, and negligible volume, is making program trading far more obvious.
Here is the true essence of the market: machines everywhere. As can be seen on the chart above, the Dax futures minimum of 6915 was hit on almost no volume. For the machines it is very easy to create a genuine flash crash. It is very important to keep this in mind as a demonstration of how easily a machine can sweep a stop.

Goldman is partially right: the Chinese rate hike is welcome by at least one market participant, as Euronext and  a few European HFTs just took out all the limit stops to the downside and made a killing on the round trip.

h/t hugovanderbubble

 

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Mon, 12/27/2010 - 05:56 | 831360 hugovanderbubble
hugovanderbubble's picture

http://opcionesyfuturos.net/expediente-eurex.html

Explanation by Spanish Trader.

Use traslator.

Mon, 12/27/2010 - 13:38 | 831737 Popo
Popo's picture

Translation: "Oops. Spilled my Starbucks on the HFT 2000.  'Had to reboot the damn thing."

Mon, 12/27/2010 - 06:01 | 831363 yabs
yabs's picture

what a joke of a market

Mon, 12/27/2010 - 06:10 | 831367 hugovanderbubble
hugovanderbubble's picture

All the forum

Please watch the SPANISH 10 yr BOND...is the key for a sell off

Above 7% = EURO CRASH ---IMF spanish Intervention

Mon, 12/27/2010 - 11:39 | 831567 Quicksilver
Quicksilver's picture

Nobody expects the spanish intervention!

Mon, 12/27/2010 - 13:49 | 831754 Things that go bump
Things that go bump's picture

++ Thanks for the laugh.

 

Mon, 12/27/2010 - 15:19 | 831907 Hephasteus
Hephasteus's picture

That was a pretty awesome joke.

Mon, 12/27/2010 - 14:01 | 831782 Problem Is
Problem Is's picture

"what a joke of a market"

True
But it's not funny...

Mon, 12/27/2010 - 06:05 | 831364 dukeness
dukeness's picture

Waddell & Reed Bitchez!

Mon, 12/27/2010 - 08:40 | 831434 buzzsaw99
buzzsaw99's picture

+1

Mon, 12/27/2010 - 14:08 | 831790 Problem Is
Problem Is's picture

European Market Comment
"Warum Junk über die Amerikaner Waddell und Reed?"

Why in the name of Xmas spirit would you <JUNK> dukeness?

Mon, 12/27/2010 - 06:07 | 831365 malikai
malikai's picture

The same shit happened with oil when futures opened at 00:00. Perhaps to a little bit less of an extent. Fucking weird shit going on..

Mon, 12/27/2010 - 06:12 | 831366 hugovanderbubble
hugovanderbubble's picture

Remember also one thing

25-26 /dec _TURNING POINT

 

Today is the first available day for apply Bradley Turning Point

Four seller days...at least...

I expect SP 1228

*Sell DJTransportation Members

*Long Medical Services & Hospitals

Mon, 12/27/2010 - 06:18 | 831373 SheHunter
SheHunter's picture

Morning All.  Quick yes or no question:  when stops are triggered by flash crash (FC) are the resulting sells/buys that were initiated by the FC later canceled?  I think not- but have read nothing that clearly states otherwise.  thnx

Mon, 12/27/2010 - 07:11 | 831395 jeff montanye
jeff montanye's picture

i seem to recollect that in the flash crash and afterward some were, some weren't.  again rule of men not law.  others probably have greater mastery of detail.  help?

Mon, 12/27/2010 - 07:20 | 831397 SheHunter
SheHunter's picture

Googling the question brought up the same conclusion:  sometimes yes sometimes not.  but your rule of men not law phrase about sums it up.  Moral:  tread nimbly in market.

Mon, 12/27/2010 - 09:40 | 831474 -Michelle-
-Michelle-'s picture

Or not at all.

Mon, 12/27/2010 - 12:33 | 831654 doolittlegeorge
doolittlegeorge's picture

Gold finger...he's the man, the man with the Midas Touch!

Mon, 12/27/2010 - 09:25 | 831463 Ese Pinche
Ese Pinche's picture

It depends on the exchange used to execute the trade.  Different ECNs/floors have different "rules" for busting a trade.  So... some were broken some were not.  The "rules" each ECN uses to determine whether or not to break a trade vary from ECN to ECN and are not published in their entirety.   They do this to keep quants/traders from "gaming the system".... bhahaahah...  Funny isn't it. 

Mon, 12/27/2010 - 22:42 | 832663 SheHunter
SheHunter's picture

..."Funny isn't it".

Hilarious.  especially if you are one of those trusting souls taught to place stops on your positions.  nimble is spelled n-i-m-b-l-e.  In and out.  In and out.  Do not linger overnight. 

Mon, 12/27/2010 - 06:24 | 831376 squexx
squexx's picture

What's the matter with those Europeans?!? Don't they know to just buy the fucking dips?!?

Mon, 12/27/2010 - 06:38 | 831386 Highrev
Highrev's picture

The IBEX basically went no bid AND no offer with up to a 40-50 point range on the bid-ask (what was left of it). Very similar to the 8:30 AM Eastern news events of importance, but in this case it came a little out of the blue first on an opening range breakdown, second on a recovery and gap fill attempt (0.2% gap lower on the open), and then a retest that failed and went to new lows.

The key was that market participants on both sides simply withdrew.

Mon, 12/27/2010 - 06:45 | 831388 nmewn
nmewn's picture

"Turn those machines back on!"

http://www.youtube.com/watch?v=_gekaEzqj5g

Mon, 12/27/2010 - 06:57 | 831391 Highrev
Highrev's picture

Same thing at the same time in the S&P futures by the way. 

Treasuries and USD currently favor higher equity prices. Wouldn't be surprised if this morning's lows turn out to be the lows of the week.

Mon, 12/27/2010 - 06:58 | 831392 AUD
AUD's picture

Gold dropped 10 bucks out of the opening in Asia this morning. An hour later it was about back where it started. Just some fools getting fleeced, thinking that a rate rise by the PBoC was going to somehow make its 'money' better.

Mon, 12/27/2010 - 07:00 | 831393 SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

Mon, 12/27/2010 - 14:11 | 831795 Problem Is
Problem Is's picture

You Got <JUNKED> For Saying Nothing
Wow... The ACLU has a Mute Civil Rights case going here...

Mon, 12/27/2010 - 15:17 | 831905 RockyRacoon
RockyRacoon's picture

Junk for nothing... must be a new Zen thingy.  Gotta look into that.

Or, can one look into nothing?  Ooh.  I need more coffee.

Mon, 12/27/2010 - 07:23 | 831398 SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

100% no chance of crash here! Just buy the fucking /ES.

Mon, 12/27/2010 - 07:25 | 831400 hugovanderbubble
hugovanderbubble's picture

Sell anypop...its another way to  trade this farce...

Mon, 12/27/2010 - 07:33 | 831404 David99
David99's picture

Economy China expects exports to slow in 2011

China's foreign trade is expected to slow down in 2011 to a growth rate of about 10 percent, compared with this year's 30 percent, sources with the Ministry of Commerce said.

Which means, 20% less imports from miners plus 10% effect due to "prudent policy" = 30% less demand

Mon, 12/27/2010 - 07:42 | 831406 Downtoolong
Downtoolong's picture

My pet line for 2011 (which I admit I stole from a Bloomberg journalist in 2008) is going to be, “There are no more markets, just manipulations”. I didn’t realize I was going to have so many opportunities left to use it in 2010.

Mon, 12/27/2010 - 07:52 | 831409 VeloSpade
VeloSpade's picture

How clever and original you are indeed...NOT.

Mon, 12/27/2010 - 09:34 | 831468 maff
maff's picture

Thats novel - a comment that is more appropriate to the commenter

Mon, 12/27/2010 - 14:20 | 831806 Problem Is
Problem Is's picture

Ms. Jarrett wants to see you in her office...

Mon, 12/27/2010 - 16:17 | 832048 brandy night rocks
brandy night rocks's picture

Did you just use the most tired, overused, ridden-harder-than-Paris-Hilton cliche from the 90's to emphasize your point about how unoriginal someone else is?

 

Wow.  Mad snaps, yo.  Or maybe awesome use of irony.  I can't tell anymore.

Mon, 12/27/2010 - 16:23 | 832069 VeloSpade
VeloSpade's picture

Yes, and my hat is still better than yours.

Mon, 12/27/2010 - 07:48 | 831408 hugovanderbubble
hugovanderbubble's picture

+1 downtoolong

Completly agree

Mon, 12/27/2010 - 07:53 | 831410 broogy
broogy's picture

PRODIGY described it best:
"Minefield" Lyrics:
This is dangerous. Open up your head feel the shell shock.
This is dangerous. I walk the mindfields so watch your head rock...
I walk through mindfields ha ha ha ...
I walk through mindfields so watch your head rock

Mon, 12/27/2010 - 09:48 | 831478 snowball777
snowball777's picture

I'd prefer something for Blythe...

http://www.youtube.com/watch?v=Lo67bWkNEiE

Mon, 12/27/2010 - 11:13 | 831543 MachoMan
MachoMan's picture

definitely profound...

Mon, 12/27/2010 - 07:54 | 831411 David99
David99's picture

Just look at the chart below

Year 1900 = 3.05 % of GDP spending
Year 2010 = 43.85% of GDP spending

http://www.usgovernmentspending.com/downchart_gs.php?year=1900_2010&unit...

And it has nothing to do with FED's spending

Mon, 12/27/2010 - 08:14 | 831420 VeloSpade
VeloSpade's picture

How about a few words to briefly explain your point and link?

Mon, 12/27/2010 - 09:32 | 831466 sushi
sushi's picture

The explanation is that there is an upside of 56.15% of GDP still to be filled by further government spending.

 

One way to fill this spending gap is to hire enough civil servants so that every bus and subway car is staffed by at least two uniformed inspectors who can grab your junk before boarding and again on departure.

Mon, 12/27/2010 - 13:06 | 831697 MsCreant
MsCreant's picture

Another way to fill it is to hire people to go on blogs and disrupt discussions that might have an anti-gov bent to them.

Mon, 12/27/2010 - 14:16 | 831802 Problem Is
Problem Is's picture

LOL. Full (Part Time) Employment Policy....

Your Corporate owned Government in Action.

Mon, 12/27/2010 - 15:22 | 831919 Hephasteus
Hephasteus's picture

Membership has it's privelages. I've got 30 lash bucks on my MasterCard.

Mon, 12/27/2010 - 14:55 | 831871 clawsthatscratch
clawsthatscratch's picture

LOL....looks like Velospade has already been hired

Mon, 12/27/2010 - 15:14 | 831898 VeloSpade
VeloSpade's picture

Don't need to pay me to grab someone's junk... female that is.  I see a hot snatch, rack and cooch, I'm goin all in.  No payment necessary.

Mon, 12/27/2010 - 19:57 | 832417 zero-g
zero-g's picture

I can across the figures before, I'd have to dig it up the source, but the CIA/DoD etc has a black budget of either 300 or 900$ million per year for people to infiltrate, disrupt, and steer groups, organizations, forums, both online and in real life.

It becomese comically easy to spot the plants, when across all sorts of forums and message boards, they use the same tactics. Take it as an indication that zerohedge has gotten a bit of attention, as there have been alot of these trolls as of late.  

Mon, 12/27/2010 - 14:26 | 831813 Printfaster
Printfaster's picture

The explanation is that there is an upside of 56.15% of GDP still to be filled by further government spending.

That rest of the US GDP (56.15%) is FIRE, minus 7% or so which is US manufacturing moving to China.

Just how is the federal government going to take over FIRE, when FIRE owns the US government?

Mon, 12/27/2010 - 12:43 | 831651 hardcleareye
hardcleareye's picture

I prefer to review my government data (slanted, manipulated and just plain made up.. etc) directly from the horses mouth or (rear end)!  This link is to a site created by Christopher Chantrill.  This is some of the "data" he represents as "facts" on this web site (there are many more but this is representative of the site).....

'Today the government reckons that only 13 percent of adult Americans are “proficient” in literacy and numeracy.'

Here is the link to the NECS study

http://nces.ed.gov/naal/kf_demographics.asp

There are four groupings of the study,

  • Below Basic:
    • no more than the most simple and concrete literacy skills
  • Basic:
    • can perform simple and everyday literacy activities
  • Intermediate:
    • can perform moderately challenging literacy activities
  • Proficient:
    • can perform complex and challenging literacy activities
  • A word like "Proficient" can take on several meanings, but for the context of this study it is narrowly defined, and it doesn't mean that those who are not "Proficient" are illiterate, which is the implied mean when you first read the statement and take it in context with the rest of the paragraph on the web site!!!!!!!

    Someone said I need to be more patient in dealing with the "ill informed" (or maybe those less than "Proficient" as defined by the NCES) on this site, so I'll stop my rant here......

    Mon, 12/27/2010 - 08:17 | 831421 TradingJoe
    TradingJoe's picture

    Couldn't care less, am out of all longs, just kept and will add to Physical PMs on any opportunity! Shorting is little, few puts here and there, although I don't have much hope of a serious pull back given the printing press!

    Mon, 12/27/2010 - 11:26 | 831554 JW n FL
    JW n FL's picture

    dont fight the ebb and flow of the FED... just be one with the natural movement, provided by your own tax dollar... even though your money is sperated from you... it still can help you... dont fight the FED and flow the money... believe the hype!

    Mon, 12/27/2010 - 15:33 | 831940 RockyRacoon
    RockyRacoon's picture

    JW has gone all Zen on us.  Is there something in the water?

    Mon, 12/27/2010 - 12:09 | 831615 rosiescenario
    rosiescenario's picture

    ....after 40+ years of investing, this is the same point I have reached....between the Fed's POMO and the HFT there is no room left for fundamental investing...only own a few silver miners, small enough to not be on any machine's radar.

    Mon, 12/27/2010 - 08:18 | 831422 fiftybagger
    fiftybagger's picture

    When all this paper is consumed in an instant, turning into a smoking pile of ashes, I hope I don't hear any of you complaining you were never warned.

    http://www.youtube.com/user/BrotherJohnF

    Mon, 12/27/2010 - 08:21 | 831423 David99
    David99's picture

    New ROK drills add to tension on peninsula

    Koreas

    The announcement by the Republic of Korea (ROK) of naval drills, starting on Monday, has again escalated tension on the Korean Peninsula.

    The ROK military plans to stage live-fire drills at 23 locations off its coast from Dec 27 to Dec 31, the ROK Joint Chiefs of Staff said on Sunday.

    Mon, 12/27/2010 - 08:34 | 831427 Bartanist
    Bartanist's picture

    It is dangerous to have trailing stops. It is dangerous to not have trailing stops. It is dangerous to buy and hold. It is dangerous to bet aginst the Fed. It is dangerous to depend on the Fed and banks.

    Those who give the inputs to the computers control all of the price action. Outside of figuring out how the computers are programmed and using the information to make money (which is seemingly illegal bcause the banks are the ones who lose) the ways to win in this market are a) with inside information (illegal for us, but not banks and politicians), b) guessing which way things will be moved (gambling on the banks' moves), c) stay out.

    I have made my choice.

    Mon, 12/27/2010 - 08:42 | 831438 VeloSpade
    VeloSpade's picture

    How were you using your trailing stops?  In what amounts?  Percentage or points?  Did your trailing orders reside on exchange server, your broker's server, or your trading computer?

    I have used trailing stops in a variety of markets with much success.

    Mon, 12/27/2010 - 11:02 | 831536 George the baby...
    George the baby crusher's picture

    Wow Velospade, you sure gave it to him with all your pertinent questions.  And you've got the right attitude, we're here to get some technicals and to piss other people of with our remarks.  Your a pride to the federation Dr Spock.

    Mon, 12/27/2010 - 15:22 | 831914 VeloSpade
    VeloSpade's picture

    I didn't give anything to him other than a friendly remark to his post.  However I'd sure like to give you a swift kick in the ass.  You sure as hell deserve it for all the flying pig pussy douchebaggeriousness you spewed out at me... you fucking pig cunt.

    Mon, 12/27/2010 - 15:01 | 831537 George the baby...
    George the baby crusher's picture

    deleted. Copy.

    Mon, 12/27/2010 - 15:25 | 831921 VeloSpade
    VeloSpade's picture

    I am not apologizing for what I said to you.  How dare you ask.  Please delete your request immediateley.  Thank you.

    Respectfully,

    VeloSpade

    Mon, 12/27/2010 - 15:25 | 831924 VeloSpade
    VeloSpade's picture

    NOTE TO SELF:

    Wash hat tomorrow.

    Mon, 12/27/2010 - 08:39 | 831430 virgilcaine
    virgilcaine's picture

    The highs are in for 2011.

    Mon, 12/27/2010 - 08:44 | 831440 VeloSpade
    VeloSpade's picture

    Cornhoolio say TP for your bunhole

    Mon, 12/27/2010 - 09:15 | 831456 Oh regional Indian
    Oh regional Indian's picture

    At this stage of the game, the risk of loss far exceeds the chance (slim to none) of gain. Looking at the raft of numbers (pay attention to that word: NUMBers) that come out day after day and week after week (of course they are all manipulated but who cares, right?), one is given a false sense of security (I've studied the NUMBers, they fit my model, or some such).

    It's good to be sitting on the sidelines and watching the largest bonfire (of vanities and fiat currencies) ever prepared about to be lit.

    Outside the box, how many people had figured freak weather into their models? And that show is just about getting started. Weather that can bring entire continents to their knees.

    Say hello to supply chain disruption and factor that into the models.

    ORI

    http://aadivaahan.wordpress.com/2010/11/18/enchanted-mesmerized-en-chained/

    Mon, 12/27/2010 - 09:53 | 831483 snowball777
    snowball777's picture

    B-b-b-but...they said the climate change would only bring us new shipping channels and awesome tree growth. ;)

     

    Mon, 12/27/2010 - 09:58 | 831486 Oh regional Indian
    Oh regional Indian's picture

    heh...time to go long snow-mobiles and reindeer eh? 

    Fun and transport!

    ORI

    Mon, 12/27/2010 - 09:14 | 831457 virgilcaine
    virgilcaine's picture

    nothing like Red the day after  Xmas.. quivering and freezing.

    Mon, 12/27/2010 - 09:15 | 831458 max2205
    max2205's picture

    Little shake

    Mon, 12/27/2010 - 09:40 | 831467 David99
    David99's picture
    Those who are long hour traders knows the daily facts.   Look at how the media & PR department twist the entire news and mis-guide the whole world :-   China announced rate increase on December 25th   Today China opened in green and stayed + 39 points for 3 hours. When Koreas tension report came on CHINA DAILY, Shanghai stocks started dropping and closed in -1.90% red.   Now to hide Koreas tensions, media turned around and are saying "stocks down because of China hike"?   If because of hike, the stocks were going in red than China shouldn't had opened in green and wouldn't had stayed in green for first 3 hours.   The main trouble at this stage is tensions between Koreas and not China hike.   Never ever trust the media.   Accredited media only reports Press Releases by WH, otherwise they won't be in good books of WH and than not allowed to enter WH for Press briefings.
    Mon, 12/27/2010 - 09:53 | 831482 malikai
    malikai's picture

    Isn't it cool how bubbles tend to inflate the most just before they pop?

    Mon, 12/27/2010 - 09:40 | 831472 bullchit
    bullchit's picture

    +1 ORI

    Regards.

    Mon, 12/27/2010 - 09:50 | 831479 Oh regional Indian
    Oh regional Indian's picture

    Thanks bulllchit.

    Regards in return and warm ones if you are in the snow-belt.

    ORI

    Mon, 12/27/2010 - 10:00 | 831487 David99
    David99's picture

    The same media was bullish when China was in green for first 3 hours and was reporting that rate hike is good for the markets but after Korea news, China turned red and entire media twisted around by saying "stocks in red because of China hike"

    So sudden of all, the same topic of rates hike turned from bullish to bearish??

    Mon, 12/27/2010 - 12:09 | 831617 merehuman
    merehuman's picture

    David 99, Thank you. Good observation.

    Mon, 12/27/2010 - 10:49 | 831518 Rastadamus
    Rastadamus's picture

    Babylon is falling... The whore that sitteth upon the waters.....

    Mon, 12/27/2010 - 12:39 | 831662 doolittlegeorge
    doolittlegeorge's picture

    Babylon sisters, shake it!  So fine, so young..."tell me I'm the only one...

    Mon, 12/27/2010 - 17:45 | 832249 Kassandra
    Kassandra's picture

    I love that song....

    Mon, 12/27/2010 - 23:51 | 832759 thegr8whorebabylon
    thegr8whorebabylon's picture

    you called?

    Mon, 12/27/2010 - 10:57 | 831519 virgilcaine
    virgilcaine's picture

    Like 1939. Bear Mkts usually start at a peak or 'buying frenzy'.  A Dow Div Yld of 2.77% looks more like a Top than a Bottom.

    http://www.fiendbear.com/bear1939.htm

    Mon, 12/27/2010 - 10:53 | 831525 TapeReader
    TapeReader's picture

    I would think that the prop trading firms just adore flash-crashes.

    So much opportunity so quickly.

    We have some algos that monitor order flow on the STOXX 50.

    You can see that they read all of the program trading during the flash crash here:

     

    http://algofutures.com/wow-indices/wow-index-euro-stoxx-50/day-trading-chart/

     

     

    Mon, 12/27/2010 - 11:24 | 831552 New_Meat
    New_Meat's picture

    I'm still back in the 1930 peak, after all, the Bernank knows everything about how to avoid another Depression. - Ned

    Mon, 12/27/2010 - 12:14 | 831622 rosiescenario
    rosiescenario's picture

    ....absolutely....he actually wrote a thesis on it...who better to kepp us from another....

    Mon, 12/27/2010 - 11:07 | 831539 erik
    erik's picture

    VIX is up nearly 11% today, after a +6% performance on Friday.

    It seems strange that the market is not weaker given the VIX action.

    Mon, 12/27/2010 - 12:52 | 831678 Printfaster
    Printfaster's picture

    Two day POMO withdrawal.  Does anyone have any method done?

    Mon, 12/27/2010 - 17:48 | 832254 Kassandra
    Kassandra's picture

    Would that be the rhythm method?

    Mon, 12/27/2010 - 21:54 | 832597 virgilcaine
    virgilcaine's picture

    Greenspan.. 'QE a Dangerous Game, Risky Strategy'.. he should know..lol

     

    http://www.bloomberg.com/video/63579250/

    Do NOT follow this link or you will be banned from the site!