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Google - There And Back Again... In Half The Time
A peculiar side-effect of the current low-volume rise market dynamic can be seen by the curious price (and volume) action in investing public darling Google. When the market was climbing in the low volume days since November, the stock grew from $531 to a peak of $626 in 42 days, on average volume of 2.02 million shares per day. Then, when the selling started, the volume picked up by more than 100%, with daily average volume of 4.7 million shares, while the decline in the stock to the onset price of $531 took less than half the time, or 19 days. Such are the vagaries of the VWAP unwind, as algorithms seek to reverse to a longer and longer mean. Google demonstrates very accurately what would happen to the stock market should there be a real, exogenous selling catalyst. Now consider that the S&P's VWAP since the March lows is around the 950 level. If the market is unable to sustain the most recent relief rally, and if this is coupled with geopolitical news or a default the PIIGS or some other unpredictable event, expect a very prompt but highly doable correction. If the market volume doubled and the time of decline was cut in half relative to the rise, consider what would happen if all mutual funds suddenly switched from a buying to a selling posture... And what this would mean for the final closing level on the S&P of that particular D-Day.
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stock markets go down? Since when?
/snark
SnP 950? That sounds about right for approx. 2-3 weeks from now.
I have a little bit longer of a timeline than that, but I agree for the most part.
I have a little bit longer of a timeline than that, but I agree for the most part. I'd s
I have a little bit longer of a timeline than that, but I agree for the most part. I'd say
I have a little bit longer of a timeline than that, but I agree for the most part. I'd say 4-5
I have a little bit longer of a timeline than that, but I agree for the most part. I'd say 4-5 weeks.
Sorry, but what was your timeline on that again?
Gurgle is the NDX linebacker to crAAPLe's wide receiver .... goog leads the way for aaple's uber out-sized NDX weighting (c. 18%) to follow-through.
goog's slide is, in part, part of the practical application of portfolio mgmt.
aside from selling tech in the 3rd week of Jan (as a rule) ... goog / aapl et cet pull back almost whenever 'we' have materials / infra / ag / energy patch 2-3 day upticks to help smooth VOLD, ADD and basic measures of aggregate confluence that institutional allocators are monitoring.
markets / basket orders are massaged so much more than even ZH would believe, imho.
great look, TD & nice Fibo time extension too.
"aside from selling tech in the 3rd week of Jan (as a rule) ... goog / aapl et cet pull back almost whenever 'we' have materials / infra / ag / energy patch 2-3 day upticks to help smooth VOLD, ADD and basic measures of aggregate confluence that institutional allocators are monitoring."
Turns out all that gibrish(no insult meant to the poster),that Harvard's MBA has showered us with,needed the trillions of the working tax payers to save the day for them. I wonder if they still truely believe in their models and their unmatched skills,which wouldn't have helped them get a job as a cabby in NYC without the help os uncle BB...
Any word if Cramer still has a $700 target on GOOG?
Hope so. Shorted the relief rally today. Short silver too.
D'oh! I'm sorry, but I think that you'll have a little bit further to the upside before the next leg down starts.
The 50 day ema on the S&P is about 1113 or so if I remember correctly. I think that we'll be in wave C of the correction until that point, before the leg down.
I have a target for the S&P bounce at 1110-1115, but my original target was somewhere around 1107. Either way, I think we'll be up more tomorrow and into Friday.
Been awhile since you did TA publicly TD, interesting :)
I have to agree though, the market is rolling over hard, I thought we would bounce to 113, might not make it... take a look at ritch bitch handbags (a.k.a. Coach COH)...
Looks like the strippers aren't getting the johns to buy shit now that the housewives have a tighter grip on the household finances.
Also, check Larry Williams Ireallytrade.com website, excellent free analysis on Google's cyclical setups.
L dub webcast (and maybe interview?) coming in a few weeks, courtesy of the MTA.
so low volume is the Weapon of the Bulls. let's debunk urban stock market myth #1, if you can leverage your favorite stock higher with $1 worth of buying, why spend $2 or $3?? so what is to keep the sellers out, a constant (government) sponsored bid on the underlying.
ever wonder what happened to the stock vigilantes? just like their counterparts they learned not to fight the FED.
How does the selling of close to 2.5 billion worth of GOOG by 2 insiders factor into the price decline?
If it falls far enough, we might get into the realm of actual price discovery.
A little off-topic but it occurred to me what "moral hazzard" really means. If Google invested in risky businesses, stocks and bonds and they fail who gives a flip. They fucked up they go down.
But if JP Morgan takes a risky MBS position and buys a CDS from AIG to cover them in case they lose, but AIG doesn't have the money/reserves to cover the CDS contract, and JPM knows this but they wanted to flip the CDS to Goldman for a profit, so when the bond goes belly up and AIG can't pay JP Morgan goes to the Treasury or Fed. Res. and says we need 100 billion or we will take the entire economy down with us -- that is moral hazzard.
Commercial banks simply cannot be allowed to engage in high risk trading of their capital. They are a special breed and must be tightly regulated. It is not a function of free market economics to create a trading environment in which the public is on the hook for the losses. It is so simple sometimes I want to scream "why don't you people in Washington do something ... it is obvious as the nose on your face!"
The reason, of course, is that Banks have the most well funded and organized lobby in Washington, DC. They like the fact that they can bet "our lives" via their prop trading machinery and simply yell, "fire" and get bailed out. It is welfare for the rich and as long as the money flows from their lobbyists to our legislators greedy little palms it won't change. No, not even if our populist president gives nice speeches chastizing the banksters for that very same "moral hazzard."
Sorry.... my rant is over.
I think the moral hazard part is when they say "well we got bailed out last time, so let's do it again but with 10X the money".
"There and Back Again" by Dildo Faggins
Shorting is the game homies. Google vs. China was a setup. Toyota mismanaging this ongoing recall was a setup. They needed reasons to get their DOELARRS out of the market while the doelarr was strong, and then you know where it is going? You know what the oligarchs are doing with their DOELARRS? They are buying GOLD.
And why would they purchase an asset that is about to decline? Mmmmm?
See what happens tomorrow i suppose. GOOGs been quite contra-market the past few days, was flat or barely up with the 2-day runup and today closed higher on a less than attractive market close.
Ultimately none of this matters in the long run.
I'm arresting this vwap algorythm for killing time and damaging eternity.
Stocks have always gone down faster than they go up. Always have and always will. Check a historical chart if you're too young to have lived through more than one market decline. The speed of the decline has nothing to do with algorithms or VWAP unwinds. With regards to current conditions, the market has been set up for a sharp decline. It could happen at any time, but a rally back into the 10300's would set up a nice ring the bell shorting opportunity.
We've always seen declines in about half the time that we've seen advances. It's the nature of market psychology.
When the trend is up, people are more cautious and have time to think about whether they really want to get in or not. It's a more gentle slope.
When prices are down, and people get caught long, they want to be the first to take profits because greed and fear set in. Thus, people have a tendency to get out a lot faster than they get in.
The google action is typical of any up/down action.
Also, between you and me, I believe that the S&P will correct further to the upside tomorrow, and maybe even Friday. I have 1110-1115 as the final target for the bounce before the further downside starts.
Today's action was the b wave of an a-b-c corrective pattern, with Monday and Tuesday being the a wave. We'll see another c wave upward before further decline starts.
Of course, Cramer was playing bear killer today, after he was spooked and telling everybody to sell Friday. Is that guy ever right? What an idiot...
On a side not I am fairly certain Cramer reads Zero Hedge because a day ago a poster on here mentioned the Keynes quote, " When the facts change I change my mind"
And that is how he lead of his show this evening so beware folks he is now using ZH and crew for material.
Government Sachs will just prop up the market with the unlimited funds they get from the Fed. 20 of 22 Mondays have gapped up on futures buying.
Tyler, another fine article, as expected, however I disagree with your use of the words "unpredictable events". Is that like the unpredictable global financial crisis, or the unpredictable effects of insurmountable debt. To my way of thinking, that is like laying on the tracks and not being able to "predict" whether a train is coming. What are the unpredictable events due to laws written, regulators appointed, media outlets controlled, and judges owned, by obviously corrupt corporate leaders in every sector?-3