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Mass Chaos, Confusion, and Bewilderment Among the Quants Today
Over the last 3 days, the 19-year old gamers running the multi-billion portfolios at TIAA-CREF and CalPers have "reduced risk" by turning off the 60-min. chart and are now using 15-second and 3-minute charts only. Of course, they are all following the same meatball tick for tick: The EUR/USD. But now some of the Algos are breaking down, and the fire extinguishers are now out hosing down the various grease fires in the computers.
Trading is now becoming totally chaotic. On the one hand, you have the Forex Megadroid leveraged speculators and the Forex Gridbot gamers in the FX markets now getting whipsawed and thrown overboard trying to game the USD/YEN and the EUR/USD. Now they have tightened down the timeframes, and instead of trading 150 times a day, they are now gunning the 5-second chart and trading 1,500 times a day.
Of course, this havoc automatically sweeps over to the stock market, as the 15-min. chart of the EUR/USD and every stock in the Wilshire 5000 has the exact same trading pattern, as if their ankles were tied together in a Chain Gang.
In fact, if you drill down even further most of the commodity stocks and material stocks are trading exactly with the EUR/USD on the smallest time frames, like a 5-min. chart.
On the computer screen, they look just like this:
But now, there is a fly in the ointment, a "glitch" in the Matrix.
Gold has now separated from the pack and has launched into Outer Space, irrespective of what the Euro does, or what the S & P 500 does.
If fact, the gold stocks were acting like a bunch of washed up actresses being treated for chronic depression up until a couple of days ago.
And suddenly, they bursted out of the Rehab Clinic and started running down Lankershim Blvd. in high heels and no panties towards the nearest casting director's office.
I mean, these stocks have just been psychotic. Virtually untradeable.
By now, every single Program Robot is wired to exclusively trade off the micro-movements of the EUR/USD. But many of those Robots were also shorting gold, and were caught offsides and now several motherboards went ablaze and torched a couple of desks. Here's a picture of the gold and silver trading desks on the 104th floor in the 1200-story Derivatives Colossus (aka JP Morgan Chase):
Now we have to wait for more data. What is coming up next? FOMC? More unemployment news? Who knows???
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LOL, thanks, it must fun finding the graphics to portray the sorted tale of quant trading these days. Well done RT!
Brilliant!
"When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done."
JM Keynes
Not always so. Monaco seems to do well as a casino centric economy. For that matter so does Nevada.
The capital development of the US is not the byproduct of a casino in the US, the casino is the product.
Keynes could never get anything right.
Robo thread as the substitute for the afternoon coffee - checked!
This is a classic Robo column...bravo!
Robo...wtf went on with the pos aig today....hedgies and bucket shops yearning for the old days? missing cit?
No doubt, "Animal Spirits" have returned...
Looks like Lloyd Blankfein devouring Robert Prechter.
Wow, did Robert Prechter molest you when you were a kid or something?
Evidently being "philosophically a gold bug" but not calling for a straight-line shot to $5,000 is enough to arouse Ahab-esque vendettas in some ...
Prechter, is that you?
Stick around, maybe you will learn something.
"Wow, did Robert Prechter molest you when you were a kid or something?"
Now that's funny. ROTFLMAO. GG is obviously hoarding gold. Robo column takes second place.
"philosophically a gold bug"
WTF does that mean? I've heard Robert Prechter making noises about Gold how "it is money" etc. and how much he loves it, but calling for $600 Gold when the chart (not to mention prevailing conditions) is practically SCREAMING it wants to go higher - much, much higher - reveals him to be a gold bear in bull's clothing.
"Philosophically a gold bug" means that Prechter believes in gold, advocates that investors own some, but would prefer not to fully commit capital to it at prices that may be 25% or more above where it will be possible to build a position in the next couple of years.
The chart was SCREAMING the same thing back in March of 2008 just before gold had one of its "idiosyncratic" pukes down 30%. Now, we're supposed to believe that won't happen again because "it was all forced selling" and "deleveraging driven," as though those two forces will never again reassert themselves. Except in the stock market (which, by the way, looks like it's trading in high correlation with gold again).
In the meantime there are some pretty big divergences setting up in terms of non-dollar gold, the gold-silver ratio, silver itself (which is still not making new highs), and the weekly RSI. http://3.bp.blogspot.com/_TwUS3GyHKsQ/SvDUq_2B3rI/AAAAAAAACeQ/pg1Pmwq6HP...
No, that's my cousin, Mickey. I've never seen such animal spirits in him!
robo....the animal spirits quote and picture are hysterical.
you are definitely a piece of work!
Robo thread as the substitute for the late afternoon coffee - checked!
Great post! Visual storytelling is always a plus!
momo scalping has never gone out of use, just out of style.
trade off of correlations now at your own peril as they all begin to break, gold leads the way.
"Here's a picture of the gold and silver trading desks on the 104th floor in the 1200-story Derivatives Colossus (aka JP Morgan Chase)"
(ROTFLMFAO)^2
Brilliant, Robo.
outstanding!
such a funny post. rofl
Gold is the only attached in a detached field of markets. I thought the Indians bought a shitload of gold from the IMF. Is this gold spike tied to this particular event on speculation of increased foreign demand ?? If so, why didn't the Red Bull boyz see it coming ??
Awesome graphics!...best article of the day anywhere...
Brilliant post Wndy....you have a way with "words"...the global economy is like a string of marionettes held together by a frayed strings right now.....everyone's neck is craning up to the skies looking for an ass blast and I think this pig is in the proocess of meeting Mr. Major Malfunction..its amazing how numbers and symbols can entice people to look the other way over and over while some pigman pulls the wad of twenties out of your pocket.
I know my view is not a popular view on many bearish sites but gold "shares" vs. physical gold "price" reminds of oil when shares lagged when oil ran to 150.....if anything ...paper gold is getting close to a short again....AEM got knee capped a while ago and is no where close to last years high yet gold is sniffing 1100...two totally different animals...NEM....not at new highs...
If we go on the gold standard again, different story..until then...just another bubble...
The algos are getting crushed! I love it! Quants think they can program all ticks to precision....KABOOM!
They can until they run out of legitimate long suckers er (buyers).
Funniest post yet. But come on everyone knows 1000 stories of that derivatives trading collosus are just redundencies!!!!
Obama has been yapping about internet security a bunch lately. I sure hope we don't get some accidental attack on our ultra legitimate super honest stock market that requires a war to defend against!!!
Or maybe the professor who got his teaching assistant to copy every physics equation known to man on his black board also talked him into a new trading algorythm.
http://www.fohguild.org/forums/attachments/screenshots/124262d1256900258...
H-
Scary comment considering I couldn't log into Wells Fargo or Etrade today, and I recall the comments from Jay Rockefeller (senator, brother of mr. big) that the internet should not have been invented and that we need a cyber-security czar. In addition, there was a media story that the DHS might need to restrict access to web sites (popular ones including relationship networking - Facebook / Myspace, etc. etc.) in order to properly address an emergency like "swine flu" or whatever they want to use to justify super governmental activity.
I think many of us feel (including Bill Gross) that a cold wind is blowing.
DHS - aka Dept of Homeland Security -
ZH will be the first to be shutdown . Keep givin em hell Boys
Great post...
you made my day ;)
Still like this GS robo classic, summs it all up.
http://www.zerohedge.com/sites/default/files/images/croceat.jpg
wait till they figure out the weak dollar is bad for gold and the stock market....this is a clusterf**k of massive proportions...remember...its just numbers and symbols...who actually buys anything becasue they truley like it ?....consider Crapple "loved" until it waterfalls on some warning coming down the road....you wake up...your number is "higher" if you are a bull ( thats good) or lower if you are a bear ( weeeee ).... and you "win"...or "lose",,,"guessing"...on which direction...your "number" will move....
There is no stock market
Just in case the "Animal Spirits" intensifies.....
Several low-grade junkers are likely to be chased....
Watch these African animals:
You could add ABK to that list and it would be complete.
ABK and RDN report tomorrow. Both have a good chance to mark their portfolios to just about any value they want on the FG side, and who would know any better? Not like we know what TRUPS deals they have insured.
We could see 50% moves in both those names tomorrow. Direction? Unclear.
Great post, Robo, makes my top five of your always-entertaining missives.
So much for the gold-dollar relationship...but keep your shorts up, because they have a lot of lost lucre to chase tonight. Just goes to show that it is better to save in gold than in fiat.
Gold goes to Moon. See? Hahahahah...! See how actually READING about compnies can help? Let's hear it for those of us who believe in company and commodity fundamentals, in REAL money as opposed to filthy paper, and in assessing the strengths of a stock, of a REAL company producing REAL assets instead of those nimbies who use TA, Moving Averages, magicians, charts, waves and stuff...
Paper goes flying out windows...into the streets below...gold floats, turds sink...
When they burst the gold bubble in 1980, they merely changed the rules on COMEX (thanks to Henry Jarecki of Mocatta) and forced a liquidation.
The equivalent today (since COMEX doesn't control the game anymore) would be for Bernanke to do a rate hike.
Total classic Robo T. You rock!
robot trader
a 3 ring psychosis, tour de force,
i have been enamored and educated all at once
i want to have your baby
send pics to robo. better yet, link a few hot ones here.
almost all the gold ever mined is still in the possession of governments and individuals around the world
not so for silver which as an industrial use metal, frequently ends up in landfills
there is actually more gold than silver held in bullion (above ground) by a factor of several times
good times for gold may (may) spell good times for silver as both a compliment, and, as a substitute for un satisfied gold demand
http://www.gata.org/node/7887
REITS did pretty well today despite the market. Pretty killer considering the volatility over the past few days.
BWAHAHHAHAHHAHAHHA !!!!!!
awesome work as always
The G20 is supposed to be talking about bubbles later this week. Could they pull out a trick to scare the gold bulls?
time123
admin: http://invetrics.com
gold bulls don't get scared.
it's an oxymoron. if you're bullish on gold not even a 2 point hike on Uncle Sam's paper would scare anyone.
let's face it. paper money is toast.
Better late than never - THANK YOU so much RT!
deafening LOLs
Uhh, sorry to be a buzz-kill, but I can assure you there are no 19 year old gamers at CalPERS gunning the markets. They trade more on 15 year charts, not 15 minute ones. Highly entertaining, anyway.
I opine that to get the personal loans from banks you ought to have a good motivation. But, once I have got a consolidation loan, because I wanted to buy a bike.