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Ever Wonder Who Controls The Endless Gunning In Afterhours Trading? Here Is One Suggestion
Presenting a selection of SPY Indications of Interest from this morning beginning at 4:30AM Pacific, and ending with the market open at about 6:30AM, which should end the debate, once and for all, who the dominant market player in afterhours market gunning,er, trading is. We urge our readers to pick the odd one Federal Reserve Board of New York Proxy out. Comparble analysis for ES. Whether JPM is buying everything in sight for itself or for a client (yes, Lliberty 33 would be considered a client, paying commissions with taxpayer money) is unclear. Although, in a later post, we will attempt to provide an answer.
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Don't worry about it. It's all part of the 5 year plan. What can go wrong? Be comforted in the knowledge that whatever happens, in 5 years we'll have a new 5 year plan.
Welcome to FED world, where nothing can go wrong go wrong go wrong.....BOOOOM!
Your move
Buy American
How many $ does this equate to?
The early bird gets the worm.
AH less volume less capital needed
JPM is buying everything in sight for Hal and Mother
I can't wait to read some commenter or another post explaining how Tyler misinterpeted this or that piece of data in an attempt to discredit it all.
"Oh, it was my grandmother Molly playing the futures market from her home computer because she's been having trouble sleeping lately and is tired of needle point. It seems she opened up one of them thar fancy nancy eTrade accounts, deposited all the money from the coffee can that was buried in the back yard, and has been making hay for the past couple of months. Yeah, that's the ticket, my grandma Molly."
That's all it is, nothing to see here, move along.
Damn Grandma Molly is a BSD! She's not retired from GS is she??
Obviously, the fed and the gov. are engineering a recovery and trying to pump up the stock market. if the economy fails to recover, which is more and more likely, then the big experiment fails. Then we are really really fucked. Don't forget it was those assholes who got us into this mess, and the same people are trying to get us out.
"it's basically over, sorrowland" Charlie Munger.
Agreed. This absolutely has to be one of the tools in their "confidence building" game. These fuckers should be shot for destroying the integrity of what once-were markets.
Anyhow, we all know how price manipulations end. In a massive and catastrophic reversion to their true value. Who will be holding the bag? That's the question.
Apart from JPM, there is "market maker" GSCO also, throwing in a few hundred thousand here and there
The process is completely straightforward. Washington needs Americans to be confident in the future so that they'll allow incumbents to remain in office. Wall Street can provide a good measure of confidence by levitating market prices at levels beyond what a free market would ordinarily support. This gives insurance companies and pension plans and retirement accounts the appearance of adequate capital for our future needs.
To artificially boost markets, Wall Street needs access to a large supply of lost cost money, freedom from interference by the SEC, and timely information about upcoming data or events. Ben Bernanke has an infinite supply of lost cost money. The SEC spends their time focusing on penny ante things like Martha Stewart or some Romanian secretary trading on a tip from her brother in law. Wall Street and Washington's cosy in-bred relationship lends itself to timely information flow.
In return for supporting markets without alerting the public to how this all works, Wall Street manipulators must be paid very nicely. A massive payoff guarantees their fullest cooperation. Even a populist president like Obama understands the rules of the game. The last thing he wants is to go into an election cycle with a crashing stock market.
James Madison and Ben Franklin must be sitting up there in heaven and looking down at Amerika with great great pride.
This is EXACTLY what they envisioned.
Beautifully illustrated. Now get back in line!
Darwin sent the memo; you may have gotten it.
Apart from JPM, there is "market maker" GSCO also, throwing in a few hundred thousand here and there
We don't have to wonder; we already know.
JPM = Federal Reserve
ALL US "markets" are a sham now. All that remains is for the people to lose confidence in Federal Reserve Notes a.k.a. dollars.
M'not very knowledgeable, but it appears PMs are closely tracking equities. Could not JPM sell off their huge supply of phony PM paper contracts on the equity downside days (having more sell volume) to artificially holdup stocks, then reverse on the days equities are up on the lesser buy volume?
Timmy at FED gave Jaime Washington Mutual in the dark of night..David's dream footprint, coast-to-coast Chase..the Revolution is nullified.
I find it amusing that many of you believe that the FED is giving money to JPM to drive up SPY pre-market based on a subset of time and sales data.
It is obvious that JPM is the biggest player today (and I believe pretty much all days) in SPY trading both before market open and after hours, however that doesn't imply that they are driving the price in any direction - rather that they are trading frequently.
Tyler - what is the net balance of SPY trades over a meaningul time period like a day for JPM? It's one thing to show a block of trades, but quite another to track the net position over a time horizon that likely encompasses their trading strategy's time horizon...
I suspect that by the close of the day, on most days - JPM will be net flat with their SPY trading, and they are just the biggest market maker during pre-market and after-hours trading.
You should do more research. This has been explained so many times whether you believe it or not thats up to you, but at least look at the info.
No Rick,
It has been posted here many times... but in much the same way it has been posted today.
A list of trades shows JPM's MMID is offered as evidence that JPM is manipulating the market, and hence it is suggested that the FED is the entity behind it.
However, a list of trades which does not show their net position, nor does it account for related activities (like writing options on SPY, arbitrage with IVV or the futures market, or activities as an authorized agent to arbitrage SPY with the 500 cash components).
It is clear that JPM pre and post regular trading hours is the biggest fish in the SPY pond.
It is far from clear just looking at their trading volume whether they have a net long or short position in SPY, and to the extent that they do, how long that exposure is kept.
SPY is one of the most liquid trading vehicles, and it can be arbitraged against other hugely liquid vehicles (like the SP500 futures of various ilk) - so understanding what is going on here is far more complex that a cut and paste from a bloomberg time and sales screen shot.
I don't suggest that I understand what JPM's trading strategy is, but my lack of understanding of what they are doing doesn't drive me to instantly believe that it is Federal Reserve sponsored activity to drive the market in a particular direction...
Until I see evidence to the contrary (which I haven't yet), I take the most obvious view of this trading - that it is market making or stat arb to reap profit for their own accord, without the hand of the Fed involved.
If it were DB making these trades, I doubt anyone would think that it was the Fed behind it, but because it is a US HQ company, you all jump to think that JPM is in bed with the Fed to do their bidding!?
I ask myself who has this kind of money. They made huge profits from trading not from just providing liquidity or market making. Have you added up how much money(regarding contracts) this requires? Have you watched their trading since march of 2009? Its circumstancial but I lean towards them manipulating the market. IMO
+1
"I suspect that by the close of the day, on most days - JPM will be net flat with their SPY trading"
Manipulating markets, either lower or higher, doesn't require the accumulation of a position. All it requires is a relatively thin market and two counterparties willing to trade between themselves at successively higher or lower prices. Computerized trading platforms are ideally suited, as Goldman admitted when their software was stolen last summer. The fact that JPM or Goldman end the day flat doesn't mean they're not involved in price manipulation.
And the tooth fairy exists....
One might be able to manipulate a single name low to mid volume stock, but noone (and I mean noone) can manipulate the SP500 by trading with themselves and turn a profit.
SPY is not only far too liquid, but there are too many ways (and too many participants) who are performing arbitrage on related assets.
Coupled with the fact that everyone pays trading fees (SEC, FINRA and the exchanges all get their cuts), it is a money losing proposition to trade with oneself in SPY.
With unlimited money anything can be manipulated in the stock market via front running and a HFT program. They are not trading by theirselves.
What if the goal was not to make money from the futures trades themselves, but rather to prop up markets the following day by creating a fake pre-trade "positive" sentiment. Aren't many trading decisions based on movements in futures? This could very well be seen as manipulation, even if the net result of the futures trading is negative.
And is it a coincidence that JPM and GSCO dominate this "game"? They are also mentioned as HFT players, so they could benefit from such market orchestrations.
Thank you. I believe Peter is missing the point. And the pumpkins.
It surprises me that many people will close their eyes and try so hard to believe that we have "free and fair" "markets". Just a sorry state of affairs...
Terrific question. Stay tuned
Don't forget that JPM is an authorized participant in many ETFs (not sure about SPY, but assume that they are), so to do this right (which would be enormously complex, but something I would cherish and therefore highly encourage you to undertake!), you need to look at their related trading in the cash market for the SP500 components.**
To simplify that part, perhaps just assume that their trading in XOM which is 3.25% of SPY is representative of the basket, and multiply it's net value by ~30.77 to see if it helps balance the net SPY value.
** For those not following - JPM could buy 50K shares of SPY and deliver them to State Street in return for the underlying 500 components of the index in the right proportions. They could also do the reverse, and sell SPY short - and deliver to State Street the components of the 50K share "creation unit" to have the shares of SPY they sold short be "created" by State Street to close out their short. If you don't factor in these activities (creation and destruction of ETF shares through their natural arbitrage facility), then you can have the false appearance of accumulating or selling a position where you are actually flat the entire time.
Your points are valid, but I watch and trade the futures and since march the activity has been very suspicious. Then it seemed QE was coming to the end and the activity was getting a lot of publicity they did more AH trading where less volume equaled less capital required.
oh my god
I believe you might be the stupidest man alive
If it were not for cognitive dissonance; they couldn't steal in plain sight. Misdirection is magic.
The SEC is too busy working on implementing the uptick rule and does not have the time to look into the matter.
Let's simplify this....
If one were to eliminate this Fed activity....
At what level would the indices be today ?
........................
Sham ?
Here's the OTHER sham....
Taxes are impositions against an individual's savings....
The Fed is also denying those that have saved ....to earn any interest for doing so....
........................
Enlighten me....
Why would any individual put money in a bank today ?
So that they can get a notice of how much of their own money they can withdraw ?
.........................
So how long can the hoax continue ?
Not to discredit TD or anything, but could this just be ETF/options arbitrage? Or could this simply be reporting of trades from dark pool transactions that happen throughout the day and are being reported on the exchanges in one big "dump"?
Also, we obviously see who's doing the buying (or atleast which broker is lending our their ID), but we should also investigate who's doing the selling. If seller == buyer, then TD may be onto something here. The cumulative value of these transactions are well into the billions. Who's holding billions of dollars worth of SPYs, and can dump them into the illiquid after hours market? Sounds very pre-arranged to me...
Who has that kind of money and is willing to use it this way day in and day out. Only one answer.
So you know that they are always buying and never selling????
How?
I don't know and I believe they do buy and sell. This is very easy when you can front run and have a HFT program.
Well, then if you believe that they are both buyers and sellers, the answer to who has the capital to do this is a very very long list indeed.
When positions are not held for very long, and especially where there are lots of ways to hedge risk very cheaply in SPY - it does not take much capital.
Assume you lever up only 10x and SPY trades around 110, you need $11 in capital for each share either net long or net short.
Eyeballing it at around 5M shares this morning (I just took a guess after scrolling through it so perhaps off by a lot), that is $55M in capital - if all of the positions were on the same side.
If the positions keep neting out to 0 however, you could do this with trivial amounts of capital.
Many times I watched the ES (SPY too) being bought one minute before closing when it was heading down, now this in itself is not proof but the volume of contracts bought were unusually high. One day it was 137,000 contracts in 2 minutes all the action was up. I know there are investors that could do this but they wouldn't unless they knew it was going up higher, and they would probably buy it in increments not in 2 minutes at closing.
Golly, how else can someone audition for Treasury Secretary nowadays?
Now I think you've hit on it....Bye Bye Tikmmy, Hello Jamie
By George, I believe you're right. And I believe the client is the FED.
and UP means what ?
It's just a coincidence. Really. It is.
Just a heads up:
SP500 / DOW / COPPER counter trend rally looks over.
http://www.zerohedge.com/forum/market-outlook-0
What was the part again about how, "Investment/Commercial/ Big Banks/Super Hedge Funds Merrill, JPM, MS, GS & Pershing are not completely control the markets at will and should not be considered monopolies?"
When 3 men can have secret meetings with the Federal Reserve, Treasury, unlimited access to cash, main stream media propaganda plants and MYSTERIOUSLY ARE MAKING ALL OF THEIR MONEY TRADING on taxpayers dimes while the U.S. is in a depression I think we can all come to the conclusion a financial Coup d'etat has taken place in the power structure.
And all along they try to keep the brain dead citizens of America in a fog by keeping them flush in tax credit and unemployment benefits.They are paying them with their own money which they are debasing daily..lol..It is brilliant
Please do the same for QQQQ,DIA,IWM, and their inverse and leveraged ETFs and futures.
I suspect they are just selling some stocks and buying some index.
How would you know this is not a trade executed for a client?
At least we no longer APPEAR to have ‘entities’ suspected of being behind the DoD firewall doing things in the markets.
It is assumed the Fed raised the stocks from the dead. Japan did the same thing when they started their decade of deflation and no growth. They want to let the air outta the balloon more slowly...like in staircase down to the end of deleveraging. Tricky here in the US with all the US debt...everyone is watching to see if they can pull it off but forget about equities.....they going down. Treasuries market will save itself regardless of the republic or its citizens.
Why would the Fed prop up the equity markets? Makes no sense, if anything the Fed should destroy the equity markets and send people into treasuries seeking safety. How else is he going to roll over 5 trillion in debt when foreign appetite is all but gone.
"Why would the Fed prop up the equity markets?"
The market is the measure of the economy for the masses (promoted by the elite controlled media)... "real market value" is political suicide.
The solution... create fear leading up to debt auction (Fed discount rate, Consumer Confidence, etc)... market (and gold) down, dollar up = successful T-Bill auction. Then back to "green shoots" and market levitation.
This is the sureal financial world we live in... the novel wouldn't have a chance of getting published... who would believe it?
I posted this a while back on my blog
I have been contending that the Fed is propping up the markets via gunning the ETFs and futures markets. Suspicious market behavior has been documented by the excellent ZeroHedge and Karl Denniger.
Question is, why would the Fed do this? Absent a motive, it's rank speculation at best.
To motive: I could only imagine that they think by somehow supporting equity prices, we will eventually muddle through, and the economy will recover.
This is amazing to me because the driver of equity prices (value) is EARNINGS and earnings are garnered by SALES, and since 70% of the economy is driven by domestic consumption... If consumers have no JOBS, there will be no consumption, no earnings, and no reason for equities to be priced anywhere near as high as they are.
This seemed stupefyingly irrational to me. Then I read THIS.
From that link: (Emphasis mine)
"Global stock markets have rallied so far and so fast this year that it is difficult to imagine they can proceed further at anywhere near their recent pace. But what if, after a correction, they proceeded inexorably higher? That would bolster global balance sheets with large amounts of new equity value and supply banks with the new capital that would allow them to step up lending. Higher share prices would also lead to increased household wealth and spending, and the rising market value of existing corporate assets (proxied by stock prices) relative to their replacement cost would spur new capital investment. Leverage would be materially reduced. A prolonged recovery in global equity prices would thus assist in the lifting of the deflationary forces that still hover over the global economy.
I recognise that I accord a much larger economic role to equity prices than is the conventional wisdom. From my perspective, they are not merely an important leading indicator of global business activity, but a major contributor to that activity, operating primarily through balance sheets. ..."
Six words: Holy crap, they DO believe it.
The logic is twisted tighter than a frame theorist's gimp suit restraints, but that's what they believe: The tail wags the dog. It's just one more crackpot idea from the mind of Greenspan, codified into suicidal fiscal policy.
When this thing drops, it's going to make history.
http://thetaildoesnotwagthedog.blogspot.com/2009/07/in-end-tail-does-not...
CON-fidence game.
I don't care who manipulates the market. I'd really rather know exactly when they choose to do it-- minus 30 seconds.
My daughter called to ask me "What's a financial crisis, Daddy?".
Without trying to be funny, I told her "It's something that happens every 5-7 years, sweetheart".
No, really. That's what I told her. And seriously, I wasn't trying to be funny.
It just comes naturally. I'm not sure if I'll become Treasury Secretary, or a comedian. I could make $20 million a movie, instead of having to justify measly bonuses just because a lot of people think I'm a financial terrorist!
Apparently, Rodney Dangerfield became a comedian at age 45.
So, anything's possible. Of course, unlike Rodney, I get LOTS of respect, which, in itself, is REALLY funny!
The material? It just comes to me! Because I'm funny!
If only I wasn't so misunderstood, because that's not funny.
Just kidding! See? I really am REALLY FUNNY!!!
Signed,
Jamie Dimon
Arky, they already saved stocks, for without their paper value, it was game over! All the pensions, insurance companies would have been gone. Now that they have spent trillions to get control of the situation they can guide money out of equities into treasuries where they want it without a confidence destroying plunge. Or not.
I wouldn't be surprised to see a C-bank selling dollars sometime over the next 3 months to keep equity markets in check. Main contributor to S&P and Dow nominal highs post-dot.com bubble was the weak dollar. Those indices priced in real money, gold, have declined ever since.
Why has oil stayed in this $85 to $70 range for months? I trade oil and fundamentals have been putrid. The banks are probably buying and selling the range for the fed. Too high prices choke the consumer, too low signal deflation and destroy equity markets. Oil somehow rallied on last weeks EIA data ... i was amazed.
I rather imagine that most of the BSD's in the financial industry were "counseled" by Bernake, Geitner and even Obama. The counsel was that you will support the stock market up from it's lows and you will keep it a a reasonable level until we tell you otherwise. Anyone caught trying to short the market down without permission would get their peepee wacked. You don't think this could happen? We were on the edge of GDII (and may still get their). Bringing the market up steadily was a key strategy in boosting public confidence. They will keep doing this because it costs nothing as the key players are not trying to build big positions they are strategically buying and then selling to keep net costs near zero (except for handsome commissions, bonuses, etc.).
THE ONLY THING THAT WILL BRING THIS MARKET DOWN is an exogenous event that scares the public in a big way. If all the average investors bail at once, the market makers probably couldn't hold it up. That is one reason they are looking at change the short sale rules soon.
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Tyler, can you ban any post (including this one) that contains the word "uvchost"? This bot is driving me nuts
I second that. Fucking annoying.