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The HFT Melt Up Is Back
Well, we had a two whole days of HFT-free markets. That was about all we could ask for. And now, like evil German-sounding robots from the future, they are back. The market is melting straight up without interruption, and without any volume. Retail is now completely out of the market, and our advice to everyone is to stay out and let the computer blow themselves up again. In the meantime, please don't ask how and why Goldman and JPM can both have a perfect quarter. The chart below says it all.
Note the V'ohlewmm
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Watch this... http://www.youtube.com/watch?v=F0lAIf78WIo&feature=player_embedded
"There are no markets anymore, just interventions"--Chris Powell
That quote pretty much sums it up. No need to add to perfection.
cromartie vs cameron
There are no free markets ... just ponzis.
Tyler,
You might want to call it like it truly is - a trillion dollar liquidity tsunami. Get ready for parabolic moves up.
Hyperinflation is a hellava drug.
+1MM
Ride it while you can.
http://www.youtube.com/watch?v=T8__EwAT8VM
Except for people who have to live in this country. They will be taking a parabolic move down.
Yesterday the SEC made them turn the machines back on and leave them on.
Like the witch luring Hansel and Gretel, with her tantalizing house.
You did a good job today, senators. Yes, we'll turn on the magical buying machine because you're such a good boy. Yes you are. You're such a good boy. Here's a scoobie snack. We'll let your brokers know before we turn it off again.
You keep this up, and you won't need campaign contributions. You can just put slush money into an account and we'll take care of it.
What a fucking joke this has become. An absolute joke.
Good thing I sold a bunch of my miners yesterday, because they're only up 7.5% today. (Sigh)
If that's not a picture of buying a stairway to heaven, I don't know what is.
Better update your charts; the "sell" button has been pushed.
Oh boy. Is today going to be part 2 of the crash, already?
They passed the "audit the fed" amendment in some form or other. I would expect the market to not like that, but what do I know....
i agree with you Tyler about the HFT machines and Algo's being almost the entire market..
but.. that looks like a normal ABC correction of the plunge.
MB: Smithers, did you open my VIX option position?
WS: Yes sir. Half your net worth.
MB: Excellent. Release the algos.
Any find the plug for the machines? Let's run a test and turn them off at 2:00 today. Let's see what happens? Just for shits and giggles.
"Never send a human to do a machine's job.."
Oh! Market is all volatile and crashy-crashy this afternoon.
I had a girlfriend like that once. But I married her.
Now that's FUNNY! I sympathize and empathize.......
Nice piece by Zachary Karabell in WSJ - The World's Dollar Drug
http://www.fundmymutualfund.com/2010/05/zachary-karabell-worlds-dollar-d...
The U.S. government also has the ability to print that global reserve currency when dire straits demand it. That gives the U.S. considerable latitude to spend its way out of a crisis without confronting real structural challenges. The U.S. has been able to forestall deep reforms because it has the dollar.
The U.S. government uses its dollars—and the ability to print them and borrow them—poorly. Large amounts of debt fund consumption of goods and health care. While today's needs are important, without sufficient investment those dollars will dissipate. You'd lend someone money to open a business or invent a new energy source, but not for dinner and a movie. Yet because of the dollar, America tends to get the money it wants. And so the dollar as an anchor of the global system forestalls fiscal crisis in the U.S. while allowing for gradual decay of the American economy.
This can go on for many years. The world needs a reserve currency to reduce costs and allow market players to assess value across different countries and economies. But that need for the dollar shouldn't be confused for American strength.
[But that need for the dollar shouldn't be confused for American strength.]
Nor should global weakness be confused with American strength. In the end, if one hangs all hang.
But yeah, it can go on like this for a long time.
Yeah...I continue to say that we should have used inflation during the 1990s to build windmills everywhere, PMBRs, and solar panels on every roof. To have spent a few billion funnybucks on pushing photovoltaic cells to higher efficiencies, diamond semiconductors, and other high tech applications for which we have no peer. CF car parts for GM or something.
We could have had so much surplus electricity that we could have cracked H2 and exported it. That is an investment.
Instead we got granite countertops and SUVs. Fatally stupid.
Nice thoughts if that efficiencies were part of the plan for the corporatists that run this shit-show....yet, alas, the consumerist nature of the western world was refined to the nth degree to maximize the transfer of wealth to the banksters and corporate elites for their own greed. Tis sad, really......
The granite can be re-purposed for tombstones. What's your point again?
[/sarc]
LOL, are we now having the HFT meltdown? Oh no, wait up...back in the green!
They get tired, propping up the market all day.
How about you try flipping the same 1 billion shares in and out of the buy/sell micro-queue all day against a nano-second latency requirement and see how you hold up, buddy.
You'd be fading 2 seconds into trading. Don't get uppity. Holmes.
Got to love this move in gold. Sure glad I bought some PHYS. Cold day in hell putting money in that fucking GLD scam.
Yeah, gold is, uh...wow. What's happening? 1233.9 and rising.
Tyler, I was wondering if it was possible if you can post examples of HFT, quant, algo funds who do this on a daily basis? Link to their corporate pages, etc. I am just curious to see what these funds "look like" so to speak. If possible, write a detailed post on this community, that would be great.
Debt, credit, money and inflation. Those 4 words define our economic system. Debt is not a problem as long as asset values go up faster. You either service the debt or refinance. No deflation or resets -- only inflation now. Resets (deflation/depressions) cause a loss of political power and no one within the beltway wants that to happen. (Or will allow it to happen.)
There is no other way. Everything must go up. The stock market, housing prices, food prices, fuel, clothes ... it all has to go up. The only thing being checked is wage growth. That would create runaway inflation so the government steps into the breech with money they print when purchasing power decreases.
That is how they kick the can.
amazing hey? HFT's use correlations to put trades on stocks that are supposed to correlate with the price of a single stock that has seen large enough order flow to cause a price movement, ergo, a single stock trade is leveraged into a multiple of all other correlated stocks. Cause and effect, true price discovery or a flawed autocorrelation? Hummph..still thebeat goes on.. there was a war in 1776 therefore there will be another in 1777, 1778 etc etc
skynet is online.. lure in shorts, pump and dump -- same motherfucking sheme since last years dip.
no no.
Retail is still there (what's left of them), putting in market orders as usual.
If you don't like HFT, you're out of luck. All the new trading rules have made it more difficult to provide liquidity - basically, the SEC wants us to take more risks to fulfill our market maker obligations and have raised all kinds of fees besides. Since MM's run on razor thin margins, a lot of shops just closed down.
Some of the only shops that can survive are the ones that can costs to the bone by employing black boxes. Voila - HFT and no liquidity when you really need it.
I have zero sympathy for the retail guys as they are the ones begging for more trading restrictions that prevented market makers from providing liquidity without risking a blow up every time the market got a little wobbly.
The more the SEC meddles, the more skewed the market becomes.
i just dont know how these HFT guys get the limits to put on quadrillions of dollars of risk with no margin. shrugs. if you trade 499 stocks cos one stock moves in one second, causing the other stocks to move how do the models keep working if they are causing the correlations to persist? ugh
Markets are random. The only thing you can ever make money on is imperfections in the delivery system surrounding the markets. Ie 99% of market players hear the news about a bankruptcy 3 seconds later than you, that's an imperfection, and you can make money on that. Or your HFT black box sits 40ms closer to the market than someone elses black box. An imperfection. You can make money on that. Typically you need an imperfection that offsets the time in your favour, a "time machine".
If you don't understand what I'm talking about, you're shark bait, and everything they tell you is just smoke so that your attention will stay with the naked lady showing the mesmerizing curves.