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IWM After Hours Flash Smash

Tyler Durden's picture




 

One wonders just what algo told the IWM to not only lift every offer but to do so for a whopping 10% higher than the overall market. Because if you like this market about 50% overpriced, you will love it at 60%. Or was this just Brian Sack telegraphing what the endgoal for the Russell 2000 is before QE2 ends? In other news does anyone even recall what a capital market is like without at least one Chinese fraud being exposed, or at least one synthetic CDO, read ETF, doing some Circque De Soleil acrobatics? We can't wait to hear what the exchanges will use as an excuse for this inverse flash crash.

 

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Thu, 04/28/2011 - 17:18 | 1217913 AldousHuxley
AldousHuxley's picture

Daily high at 94.35

Thu, 04/28/2011 - 17:36 | 1218004 jedimarkus
jedimarkus's picture

I think they adjusted it to 86.50

Thu, 04/28/2011 - 17:24 | 1217929 ivana
ivana's picture

Jesus!
Freedom and markets = gone

Thu, 04/28/2011 - 17:22 | 1217932 moldygoat
moldygoat's picture

remember when obama had all the bankers in a room togethor and told americans to buy stocks?

I wonder if mr. Soetoro will announce when its time to sell?

Thu, 04/28/2011 - 17:38 | 1217998 Boilermaker
Boilermaker's picture

In all fairness, the profit to earnings ratios were lookin' pretty good then. now. forever more.

Thu, 04/28/2011 - 19:33 | 1218393 Gary Busey
Gary Busey's picture

Boiler Up

Thu, 04/28/2011 - 17:29 | 1217949 kato
kato's picture

EMD selling was offset by TF buying prior to 4PM close. take a look. and go figure...

Thu, 04/28/2011 - 17:28 | 1217955 unclebigs
unclebigs's picture

Probably just a dumb slv trader punched in the wrong symbol.  slv has now attracted the dumbest money in the market.

 

 

Thu, 04/28/2011 - 17:33 | 1217980 Quinvarius
Quinvarius's picture

Most of it is trying to short.

Thu, 04/28/2011 - 17:37 | 1218016 Cdad
Cdad's picture

Quinvarius,

Correct.  You can bet on it...a short sale.

However, as Tyler has suggested, it can create a vacuum upward, depending on the size of the trade up there.  That is to say that what will often happen after a trade like this, and they are going on all over the market [due to the nature of fractured exchanges], someone now has incentive to cover all the way up to that mark.

This happens on the Roach Motel [SPY] almost every night after hours.  But if you try to draw attention to this fact, folks will just mutter that it is a roll up quote.  But here again, there is nothing to roll up at that mark.

As we discover more and more cyberwar coming out of China, so too will we soon discover just how much of our electronic markets are manipulated in this same way...by China.

But I wouldn't worry about it.  I'm sure Duncan Niederauer is on it...you know, when he is not trying to sell the floor of the NYSE to the Germans.

Good grief [and by that I mean who has faith in any of this anymore?]

Thu, 04/28/2011 - 18:25 | 1218212 ZeroPower
ZeroPower's picture

Hi Cdad

Are you talking about the SPY trades that typically go way above current b/a during early a/h? Those are merely delayed prints coming from a DP. Nothing much more to read or hypothesize about. Happens a lot on the very liquid names (AAPL, C, BAC, etc) as well, typically with prints back to VWAP no matter what the ending px was at.

Thu, 04/28/2011 - 18:48 | 1218274 Cdad
Cdad's picture

It isn't a "roll up" quote if it is above the HOD.  Your answer is standard, but you are answering a different question.  If I were to apply your answer to tonight's IWM issue, you'd be telling me that someone paid up 10% during the day, but the quote was delayed?

Don't think so.  I know the difference.  

Can anyone see the volume that was printed up there on IWM?  For some reason, I can't find it.

Thu, 04/28/2011 - 19:06 | 1218319 hambone
hambone's picture

Ey Cdad,

Amazing as well TNA smashed up in an instant from $93 and change to $95 exactly...not $94.99 or $95.01.  But this was banged on the close.

Thoughts (beyond fucking criminal syndicate)?

 

Thu, 04/28/2011 - 19:25 | 1218366 Caviar Emptor
Caviar Emptor's picture

There's so little depth to this market that they have to gun the indexes in order to attract dumb money bids on the stocks they're trying to top tick before QE runs dry

Thu, 04/28/2011 - 19:42 | 1218412 Cdad
Cdad's picture

Hambone,

Criminal syndicate Wall Street banker [or communist Chinese prick], flash prints the IWM to to $94ish [or exactly 10% so as not to hit the trip wire]...then sets a short position via some flea bag exchange in some forsaken shit hole somewhere, then flashes it back down.  More than just an instantaneously profitable trade, this manipulation does two things:

1.  If the trade was large, it gives said criminal an incentive to cover the short position, which then consequently can take the IWM higher against all logic [or actual economic facts].  His buy side bias is built into the initial crooked trade.  Now who might want to create synthetic buyers of the IWM?

2.  Secondly, just look at what it does to all of the indicators on your chart.  Then consider that this is the small cap index.  Contemplate how that might affect all the underlying stocks.  You are not going to go out to buy your favorite small cap based on this trade, but the algorithms that drive 80% of all the trades might be a tad bit confused in the morning by these skewed readings.  Not Goldman's algorithm, but maybe some Chinese algorithms that were poorly reverse engineered....if you get my drift.

It seems pretty self explanatory...except for the crowd that ALWAYS instantly chirps in with, "It doesn't mean anything."

But whatever...I go back to the question of who actually has faith in this system anymore?

Answer: the criminal syndicate.  They are the only ones left in the market.  Average Joe took his losses and went home.  And some folk are confused about the zero volume environment.

Again, can anyone see the print on that trade?

Thu, 04/28/2011 - 19:55 | 1218447 hambone
hambone's picture

Cd- spot on.

Thu, 04/28/2011 - 20:12 | 1218497 Cdad
Cdad's picture

This kind of trade has been going on all over the market...since the summer of 2007...as far back as I know.  Nothing is done.  Duncan Niederauer doesn't even cancel the trade.  Why?

Answer:  because these are THIER trades.  Ah, the criminal syndicate known as Wall Street.  Just wait, however.  Something tells me that these guys have actually gone too far now...and I am referring to all the nonsense going on in silver.  When Average Joe next learns that their hands are all over his silver trade, as well.  And you ALL know what I am talking about here.  

Yep, sucker him on his mortgage, flash crash his stocks, short his Lehman shares into oblivion with counterfeit shares [and become a billionaire], kill his dollar, force him to put his paycheck in his gas tank....and then...fuck with his silver.

Was watching Max Kaiser last night...lol...calling for the decapitation of bankers.  The hatred is running so high for these guys...we must be getting close to the learjet exodus.

Thu, 04/28/2011 - 20:34 | 1218573 SheHunter
SheHunter's picture

...Yep, sucker him on his mortgage, flash crash his stocks, short his Lehman shares into oblivion with counterfeit shares [and become a billionaire], kill his dollar, force him to put his paycheck in his gas tank....and then...fuck with his silver....

Here, Here.   Well said Cdad. 

Thu, 04/28/2011 - 20:32 | 1218565 New_Meat
New_Meat's picture

Cdad--a while ago SPX correlation to the SP500 stocks was like 87%.  Wonder what it is a) w/SPY today, and b) IWM same.

any data?

- Ned

Thu, 04/28/2011 - 21:34 | 1218787 Cdad
Cdad's picture

How can you possibly calculate that to any specificity at all?  As I have been commenting on for months, on any given day, any given firm can print infinity index shares...via the creation units machine.  That would be infinite index shares built upon a finite number of equity shares.  And then they can simply give the index fund an opening and closing price print that is entirely disassociated from reality.

That introduces the weighting issue which was part of the issue during the flash crash.  When the rush for the door is on, if infinity shares are exiting, the correlation goes from 1 to ________?  

I'm sure you can inquire with a criminal syndicate Wall Street banker, and I'm equally sure he will send you a prospectus...you know, if your into syndicate information dissemination. 

More simply, you can report to iShares...where the correlation on the IWM is listed as 1.00.  Of course, that is averaged monthly....across five years...so....

http://us.ishares.com/content/stream.jsp?url=/content/en_us/repository/resource/us_market_indexes_laminate.pdf&mimeType=application/pdf

Ned, I'm not sure there is a meaningful answer to your question.  However, I'm pretty sure that at the close of business today, there was zero correlation between the IWM and the underlying stocks.  Pretty sure.

 

Fri, 04/29/2011 - 03:27 | 1219442 ZeroPower
ZeroPower's picture

except for the crowd that ALWAYS instantly chirps in with, "It doesn't mean anything."

Im gonna assume this was directed at me, despite my not having a comment about IWM, merely a retort your SPY musings.

Anyway, the trades were all cancelled. So perhaps "the market is broken, and theyre trying (albeit failing) to fix it" fits better.

Thu, 04/28/2011 - 20:02 | 1218460 Village Smithy
Village Smithy's picture

The most I can tell you is that 1,855,427 shares traded in the first AH minute and it was only in that minute that the price spiked. Also the volume was almost the same as the last minute of the RS (1,844,121 shares). Which was by far the highest volume minute of the day so we aren't talking a housekeeping error. Hope that helps.

Thu, 04/28/2011 - 20:19 | 1218525 Cdad
Cdad's picture

Thanks...yeah, I saw the volume.  Unfortunately, I don't see the print at $94.35.  How much of it was up there?   That is the key to figuring what comes next.  If it was large, then you should see capitulation early in the morning [buy side exhaustion]...and then a possible amazing bounce back...one that is very surprising and no one can see coming  ;)   

If it was small, then we'll just have the usual money printing, garden variety market manipulation tomorrow.

What a fucking joke.  This is the wasteland that Ben Bernanke, Hank Paulsen, and Mary Schaprio have made for us.

 

Fri, 04/29/2011 - 03:25 | 1219439 ZeroPower
ZeroPower's picture

Youre right, there is still a certain range despite the delayed cross for SPY. However note i wasn't talking about IWM as i don't know what that was besides what is presumabely correct in thinking it was an algo going nuts and lifting all offers until the stink ones 10% higher.

As i mentioned, for the liquid names and ETFs it is very common to see those a/h prints, within range.

Thu, 04/28/2011 - 19:25 | 1218359 Rick Masters
Rick Masters's picture

+10000...best comment of the year, Cdad! (But I wouldn't worry about it.  I'm sure Duncan Niederauer is on it...you know, when he is not trying to sell the floor of the NYSE to the Germans.)~~CLASSIC!

Thu, 04/28/2011 - 19:46 | 1218428 Cdad
Cdad's picture

Fucking Duncan Niederauer...assclown extraordinaire.  There has been so many shenanigans at the NYSE in the last three years that I can understand why Duncan is selling.  He'd otherwise be running into some contract renegotiation issues right about now...after all the capital he has destroyed...and he'd be selling his shares into all time lows.

Now...who's up for the task of selling the Washington monument?

 

Thu, 04/28/2011 - 17:27 | 1217961 bob_dabolina
bob_dabolina's picture

 We can't wait to hear what the exchanges will use as an excuse for this inverse flash crash.

Three words:

Waddell And Reed

Thu, 04/28/2011 - 17:39 | 1218013 jedimarkus
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Kansas had a real two lot to sell in the EMD and had to buy 10 shares of IWM.... machines front ran the mess....

Thu, 04/28/2011 - 17:34 | 1217994 hambone
hambone's picture

Sacks Coke fell over on the BUY button...ooops.

Thu, 04/28/2011 - 17:39 | 1218014 Cassandra Syndrome
Cassandra Syndrome's picture

 

What would have happened here? Was anything matched? Because on a non bloomberg Professional terminal the highest for the day and after hours for this ETF is 86.

Thanks in advance.

Thu, 04/28/2011 - 17:56 | 1218104 Chuck Bone
Chuck Bone's picture

The print comes from the closing auction. Many orders were matched. They have all since been canceled. We shorted a chunk in the closing auction, but alas an hour later the trade was canceled.  We were filled for a close to an hour though.

Thu, 04/28/2011 - 17:42 | 1218024 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Banana Republic 101. The USA is a total sick joke, a depraved humiliation in the history of the world. Be gone with it.

Thu, 04/28/2011 - 17:44 | 1218049 Boilermaker
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We're striving to be more like the EU <rolling eyes>.

Thu, 04/28/2011 - 17:46 | 1218056 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Try Iceland or Egypt for your role model.

Thu, 04/28/2011 - 17:56 | 1218094 snakeboat
snakeboat's picture

I'm thinkin of going Finn...

Thu, 04/28/2011 - 17:53 | 1218070 hambone
hambone's picture

You monkey boy will be among the first sent to the gulags for a little patriotism refresher (yes, patriotism = consumption and suspension of criticality).

Get with the program cause if you aint with us, ur 'gainst us!

Oh, and don't take it all too serious, it's the only life you've got so remember to buy PM's, guns, food, and some good gin.  What is in motion can't be stopped now so make the best. 

Thu, 04/28/2011 - 17:45 | 1218042 steveo
steveo's picture

I wish I had more clarity :-)

It is clear that there are forces that want to collapse the economic system of at least the United States.

The big question is Why?

Why is anyone pushing for a "global currency" when the destruction and chaos created by the Euro, in particular by the inability of individual countries to "bail themselves" out by devaluing their currency,...when that destruction and chaos is obvious.   

Give it the 7th grader test.   If you could explain it to a 7th grader, and they would come up with the obvious conclusion.....that is a good test.   Could you explain to a 7th grader how the Euro is doomed to cause chaos and in the long run, fail, be abandoned.  Yes, you can.

Why then are forces pushing for economic collapse and global currency.   I think this is the 80,000 gorilla in the room, think on these things Weedhopper.  Visit and rant.

http://oahutrading.blogspot.com/

Thu, 04/28/2011 - 20:11 | 1218490 PY-129-20
PY-129-20's picture

That's what I am saying all the time, steve. But nobody is listening anymore. Everybody is going bullish - economy is booming, every company is celebrating new records, the lowest unemployment since 1992, so EURO must be a good thing - look at the Dollar - Euro is good,right? ... Bullshit. They never mention the 10 million people in my country that just get by - they never mention the loss of living standard - sure, why should they? they never mention the anger that is building up....

I've given up. I can only rescue myself when this house of cards is finally falling...hopefully, China is revolting by then or otherwise we will have sold our Kraut manufacturing completely to them - like your country...

seriously, I can't stand the current system anymore...I can't stand these high priests of economy and cnbc whores...all these deceptions and lies...but I know this fight will take some more rounds....

I was someone who applauded the European idea - and I still do in a way...but I feel betrayed by those that are sitting in Brussels - the EU - what does it represent? The citizen? Bah. It only represents a class of politicians, lobbyists and bureaucrats... - the European idea is already dead - the years of wealth and peace - they also might come to an end...is this the Europe we hoped for?

I will oppose the idea of a global currency, as I oppose this expression of globalism. It makes me sad to see the USA in such a condition. I've not lost my respect for the ordinary American, though.

Thu, 04/28/2011 - 21:20 | 1218656 i-dog
i-dog's picture

"Why is anyone pushing for a "global currency" when the destruction and chaos created by the Euro, in particular by the inability of individual countries to "bail themselves" out by devaluing their currency"

You appear to be missing the other half of their plan: to eliminate the [in their view] quaint concept of "individual countries". All those little countries -- which currently address the needs, cultures and aspirations of their disparate citizens -- will just become consolidated administrative zones for the all-knowing feudal lords. (For example, the 50 states of the USA are planned to be consolidated into just 10 FEMA control zones).

The Global Currency is needed to usher in the Global Government. Individual governments will then be progressively stripped of any decision making ability and eventually devolved to simple councils ('soviets', in Russian) ... in the same way that state governments have been emasculated by the federal governments in the US and Europe. The vehicles will be the WB, WTO, WHO and other central planning bureaux. Most of the "treaties" needed to transfer individual state sovereignity to the central planners have already been put in place. The 'Anthropogenic Global Warming' hoax is just the next cab off the rank to implement a global carbon tax "treaty" and associated global planning of energy distribution.

The fact that central governments and central planning in Europe and the USA are currently failing -- and that the USSR has already failed and split back to individual states -- will not stop the old ruling families and their bankers from continuing to push ahead with their planned "global solution".

We can only stop them by actively attempting to decentralise real local decision making power back to individual state governments in the USA, UK, Europe, Canada, Australia and elsewhere.

Thu, 04/28/2011 - 18:00 | 1218103 Manzilla
Manzilla's picture

TNA had a quick spike right at the close too. It wasn't 10% but it jumped to $95 in a flash in the last minute. I was wondering what the hell was going. I'm not sure if it there anything unusual going on or connected to the IWM but I just happened to see it and thought what the f$&k?!?!

 

The smoking baby was stumped as well. I had to yell at him a say puff, puff give muthaf&*%a!

Thu, 04/28/2011 - 18:08 | 1218129 hambone
hambone's picture

Amazing as well TNA smashed up in an instant from $93 and change to $95 exactly...not $94.99 or $95.01.

Interesting...this almost gets me to wondering if everything going on here is on the up and up???

I really wonder who sold at those prices and who bought???  Any idea how much volume changed hands???

Thu, 04/28/2011 - 18:53 | 1218287 cosmictrainwreck
cosmictrainwreck's picture

wondering if "everything is on the up and up"? hahahahaha, that's rich. you made my day

Thu, 04/28/2011 - 19:33 | 1218386 Caviar Emptor
Caviar Emptor's picture

Could be a ruse to dump unwanted shares here before the end of QE. IMHO.

Thu, 04/28/2011 - 19:51 | 1218418 hambone
hambone's picture

Cav,

point is who was suddenly in such a rush to buy in the last seconds @$95 and wouldn't accept a lower bid???  Couldn't find a single bid between $93.25 and $95...nobody willing to sell at a nice $.25, $.50, $1.00 premium?

No, looks like "someone" really wanted to pay nothing less than $95. 

Hmmmm, who would do such a thing and bleed fiat credit on the trade?...and have a history of doing this for the last couple of years???  Ah yes, those with infinite fiat and an agenda come to mind.

Could be an attempt to push the market higher or to entice HFT's or whatever but it's all a farce.  I can't see anything any longer in our economy and financial system that isn't a farce?

At least in a command economy everyone understands who is pulling the levers and for what effect.

Thu, 04/28/2011 - 18:28 | 1218218 disabledvet
disabledvet's picture

A market call?  Again?  And "to hell with 40%.  It's 60% i tell ya!  60!"  Now I know why Goldman deep sixed ya'!  Still..."you have spirit young Bulgar."  And now that i'm watching all these "late to party bull(shitters)" and believe me when i tell ya' "spirit counts for something."

Thu, 04/28/2011 - 18:36 | 1218240 mynhair
mynhair's picture

TG, my TZA bid didn't get hit at close.

Thu, 04/28/2011 - 21:23 | 1218745 espirit
espirit's picture

Mine did a little above your limit, but I did see TZA 31 even just after I bought.  Had that sick feeling for a split second until it passed.

F'ing Crooks.

Thu, 04/28/2011 - 19:22 | 1218356 Rick Masters
Rick Masters's picture

Bernanke smash!

Thu, 04/28/2011 - 20:01 | 1218457 Phillips Capital
Phillips Capital's picture

That's why i own physical shares of IWM in my basement. price is fiat, and subject to manipulations. :) wakkawakka... 

Thu, 04/28/2011 - 20:31 | 1218571 UninterestedObserver
UninterestedObserver's picture

Big deal - wake me up when Skynet nukes the planet

Thu, 04/28/2011 - 20:41 | 1218607 bothsidesnow
bothsidesnow's picture

I thought you liked China, they are driving the dollar and every person is buying an ounce of silver. What gives with the China bashing.

sarc/off

Thu, 04/28/2011 - 20:45 | 1218618 DollarDive
DollarDive's picture

Nothing to see here sheeple....move along now. !!

Fri, 04/29/2011 - 01:55 | 1219344 dcb
dcb's picture

if you undeeerstand the math of the algo's you should have almost an even number of up crashes as down, it just has to do with resonance. hard to explain. up and down moves would be predicted by both, and I am sure you see other up moves but those aren't drawn attention to.

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