Fractal Algo Strikes Again, Infects Crude Oil

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Thu, 07/07/2011 - 14:06 | 1433294 firstdivision
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This is getting fucking ridiculious.  Some days I wish an astroid would strike and wipe out all humanity for our stupidity. 

Thu, 07/07/2011 - 14:22 | 1433361 Fukushima Sam
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Um, volatility bitchez?

Thu, 07/07/2011 - 14:29 | 1433388 Hugh G Rection
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Anyone see the little EE raid around midnight PST?  Au and Ag have rebounded quite nicely.

Thu, 07/07/2011 - 14:32 | 1433396 Henry Rearden
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astroid bid with

Thu, 07/07/2011 - 14:46 | 1433486 TheGameIsRigged
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I could not fucking agree more.  This manipulation is out of control.  I am seeing it everywhere, in ALL aspects of my life - and it sickens my stomach.  When will we rage against the machine???

Thu, 07/07/2011 - 14:51 | 1433494 Dreadker
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When people stop behaving like those described in "Bullet in the Head"....


Believing all the lies that they're telling ya,

Buying all the products that they're selling ya,

They say "Jump!!" and you say "How high?"

You're brain-dead, you gotta f*ckin bullet in your head!

Thu, 07/07/2011 - 15:12 | 1433588 Hugh G Rection
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That takes me back to high school.  Rage was a great band.

Thu, 07/07/2011 - 15:26 | 1433650 Dreadker
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Indeed - whenever Tyler posts something like this I start listening to Rage again ;-)  So like every 15 mins these days lol

Fri, 07/08/2011 - 05:09 | 1435330 LudwigVon
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woahh wa wiki wiki wiki ... good bass guitar in that whole album.

Thu, 07/07/2011 - 16:25 | 1433931 Bullish_NoMatte...
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Rock that - "Buyin' all those ipad 2's that they're sellin' ya!"

Thu, 07/07/2011 - 15:59 | 1433813 Tejano
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Rage away.  The machine doe not sense your ire, nor does "it" care. You are powerless. Your rage is a product of your weakness.  

Thu, 07/07/2011 - 16:07 | 1433847 Manthong
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Bad case of the DT's.

Time for re-hab.

Thu, 07/07/2011 - 18:20 | 1434350 Conrad Murray
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I could not fucking agree more.  This manipulation is out of control.  I am seeing it everywhere, in ALL aspects of my life - and it sickens my stomach.  When will we rage against the machine???

Never. It's far too easy and safe to sit behind a monitor and feign disgust.

Thu, 07/07/2011 - 14:06 | 1433295 TruthInSunshine
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Bring in Lenny Dykstra to clean up the mechanism that is now a mess and crisis in these markets.

Or Bernie Madoff.

Or Charles Manson.


Thu, 07/07/2011 - 15:26 | 1433655 disabledvet
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Actually where's our man Al Gore Rhythm.  We need to get him on this case ASAP!

Thu, 07/07/2011 - 14:07 | 1433301 mayhem_korner
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Tossin' traders like a mechanical bull...

Thu, 07/07/2011 - 14:07 | 1433302 Robslob
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This must be a government algo...highly efficient ya know...

Thu, 07/07/2011 - 15:35 | 1433342 firstdivision
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Judging by the fact that I suspect it bought high and sold low...well I'd have to agree with you on that. 

Thu, 07/07/2011 - 14:26 | 1433377 Greyhat
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Two algos, .gov versus .oil. They can not drill out more oil, but they can manipulate the markets. Big oil money answered...

Thu, 07/07/2011 - 14:07 | 1433303 Smartie37
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Bustin' Out on Some Serious Funk !

Thu, 07/07/2011 - 14:08 | 1433310 surfersd
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free markets. it is JPM using their profits from their SPR purchase to have some fun.


Thu, 07/07/2011 - 14:08 | 1433313 slaughterer
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NY Fed trainees now have a new hobby now that POMO desks do not need to be manned.

Thu, 07/07/2011 - 14:08 | 1433314 dcb
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they need a tobin tax!!!

been trading that today with some success intrday, lots of buy and sell with stops. the intraday moves have been a couple percent uco and sco

Thu, 07/07/2011 - 14:10 | 1433316 espirit
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Relax, it's just a test pattern.  Like in the twilight zone.

Thu, 07/07/2011 - 15:05 | 1433561 Misean
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That was Outer Limits.

Thu, 07/07/2011 - 15:18 | 1433613 espirit
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No such thing. lol

Thu, 07/07/2011 - 14:09 | 1433317 dcb
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rather clear the point is to hit orders and cause selling then they buy very very quickly.

Thu, 07/07/2011 - 14:12 | 1433321 cougar_w
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This is not one algo, but at least two. They are trading against each other.

In a healthy market they would be trading against slow, stupid humans. But the way things are now, the only action out there is against other algos. Was only a matter of time before two found each other that had similar enough models they started bitch slapping each other.

Internal limits are probably the only thing that keeps these things from flash-whatever-ing the market. The coders are getting smart.

They can play this game for another hundred years.

Thu, 07/07/2011 - 14:12 | 1433326 mayhem_korner
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From dead-panner Steven Wright:

I put a humidifier and dehumidifier in the same room and let them fight it out.

Thu, 07/07/2011 - 14:16 | 1433338 TruthInSunshine
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Unless Bernanke keeps 'pouring' liquid(ity) into the humidifier, the dehumidifier wins.

Thu, 07/07/2011 - 17:44 | 1434272 AGuy
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If Deflation occurs, Federal Tax revenue will drop like a stone causing the US gov't to default. This Inflation. Inflation if the gov't prints, or dollar becomes worthless overnight because the federal gov't defaults (aka the Collapse of the Soviet Union when no body wanted Rubles anymore).



Thu, 07/07/2011 - 14:39 | 1433433 francis_sawyer
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+1 ror

Thu, 07/07/2011 - 15:27 | 1433659 agNau
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Paper will only trade as long as there is confidence. Inflation will only work as long as there is confidence. Confidence breaks, system breaks. Look for the Dynamic DUO! Confidence/Contagion Appearing soon at an economy near you!

Thu, 07/07/2011 - 14:35 | 1433346 espirit
espirit's picture

More like a single algo test to pick peaks and troughs, then stabilize price.  Replace the ramp or fall with price change recognition code, and SkyNet II can absorb errant algo defects.

Govt price control, et al.

Thu, 07/07/2011 - 14:27 | 1433379 Grinder74
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Does NY recognize same-algo marriage now too?

Thu, 07/07/2011 - 14:43 | 1433444 NotApplicable
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Can hardly wait for the Three Stooges Pattern to emerge.

"Oh, wise guy, huh?" *slap*

"Why I oughta..." *slap* *slap*

"Nyuk, nyuk, nyuk."   *slap*  *slap* *slap*

Thu, 07/07/2011 - 14:44 | 1433468 Greyhat
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This could be a reaper algo, sucking out the .gov vampire algos blood. Some kind of self service QE... :-)

Thu, 07/07/2011 - 14:13 | 1433328 Internet Tough Guy
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Thu, 07/07/2011 - 14:37 | 1433421 Hugh G Rection
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Casey Anthony polygraph test?

Thu, 07/07/2011 - 15:39 | 1433720 Miss Expectations
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Couldn't be.  Sociopath's lies are not detected by polygraphs because the sociopath's physiology is unchanged when they lie.  My guess is that it wouldn't work on any elected official.

Thu, 07/07/2011 - 15:42 | 1433729 Miss Expectations
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Could's been a busy day:

Thu, 07/07/2011 - 14:15 | 1433336 Piranhanoia
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I am not sure that I didn't miss a piece regarding hacking the exchange, but a question;   If hackers can get in any site in the world that is supposed to be protected,

Why the hell would anyone want to trade where you can see it is rigged and hacked regularly?  Is it the same old herd thinking they can latch on to something glorious if they follow the action?  

Has there been a story about the direct hacking of the machines that trade with each other?

Thu, 07/07/2011 - 14:52 | 1433493 Rynak
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There can't. This isn't hollywood. You can't just crack any machine wherever it is, and do whatever you want with it:

1. Both machines need to be directly connected (or one needs to takeover a machine that has direct connection to the target). You cannot just cast a magic wand and get action at a distance. In this case, The trader-machines (running the algos) are connected to the exchange servers - but they are not directly connected to each other. Thus, the only thing an algo-machine could directly exploit, is the exchange, not other participants.

2. Once you have a connection, you can't just wave magic wand and takeover a machine. Instead, the other machine needs to have a software error, which you can exploit to make the machine do something, which it shouldn't do. THIS is what usually is called a takeover - making buggy software of the target machine do the stuff you want it to do.

3. In the absence of a direct connection, you cannot takeover another machine - but you may be able to exploit errors in it, to make them crash or do stupid things. For example, CPL a few weeks ago made the experiment, of selling a stock, for zero .... the algos quickly went nuts on that.

Thu, 07/07/2011 - 14:15 | 1433337 Cognitive Dissonance
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Looks like it had a tiger by the tail.

Or the tiger had tail risk.

Thu, 07/07/2011 - 14:19 | 1433353 cougar_w
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Don' be mess'n wit da tie-gar. Mack dat tail an she be all whoop yo Nancy azz.

Thu, 07/07/2011 - 14:15 | 1433341 buzzsaw99
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time to lower oil trading margins.

Thu, 07/07/2011 - 14:41 | 1433437 firefighter302
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I had the exact same thought, Buzzsaw.


Thu, 07/07/2011 - 14:18 | 1433348 campag
campag's picture

What you show here happens on a daily basis , this is not out of the ordinary. Also the price movement is smaller than usual. Yes it is corrupt and manipulative , many of the old  traders/ locals will not take outright positions - You want to see a bad market look at brent/wti flavour of the month again for the powers that be.  

Thu, 07/07/2011 - 19:25 | 1434479 Chartsky
Chartsky's picture


I trade CL every day and it constantly spikes 10-15 ticks from the algorithm trading.


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