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Massive Early (Terminal) Squeeze Withering
Someone threw in the towel this morning, and volume exploded. Subsequent to the initial exuberance volume has been retracing to average, and will promptly turn below average in the next few minutes.
Indicatively, 135mm shares traded yesterday and the entire day's gap was filled on manic indiscriminate marginal buying of only 27.4 million shares in the first half on hour of trading today.
By the way, we are now back to Monday's close, with a 5:1 down/up volume ratio completely netting itself out. For clarification: Taleb on marginal buying, and the lack of discrimination of forced buyins to cover at any cost.
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I wish someone would take the time to explain these posts once in a while.
Yes, please someone break it down.
I'll try, but I'm sure there will be some problems with the explanation:
1. As prices got bid up this morning, eventually a large short position was caught out and had to close as they faced a squeeze on their pricing. In all likelyhood, they lost money (or made very little). This caused a spike in volume, which seems to indicate price increases being supported by volume (which has not really been apparent in this bull market).
2. As time is going on, the squeeze has played out, and there is even LESS volume moving forward - meaning that we could wind up at average or slightly above average volume for the day, with at least a mild increase in prices, if we don't maintain the current level.
3. It's worth noting, if you go back far enough (2000, 2001), this kind of behavior was pretty typical of the market as it neared its peak.
4. It's possible (even probable) that the squeeze was orchestrated by Fed flushing cash into the system, through Treasury repurchases or other such manipulation. Alot of the high powered traders are able to spot accumulations of stop or sell orders, and can find ways to drive prices to that level and force a squeeze (I have been a victim of this in the past).
All in all, it's an indication of market manipulation more than actual bullish market behavior - people taking scalps where they can, and as a side "benefit" driving the market higher. If it gets high enough, the bullish behavior becomes self-perpetuating. But we haven't seen the self-perpetuation YET - volume hasn't really risen to support the price increase.
If, and when, this self-perpetuation kicks in - it will not end well for people who finally "give up" on being short. Irrational behavior has a bad habit of going on for longer than we realize.
I don't think this is one of those times, though.
In other words, every time someone goes short in a significant manner, he is squeezed out and destroyed by the bots in this VR game.
Thanks I appreciate your explanation.
This is a bit like forced sellers at the March lows, but now it is the bears that are being caned
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Goldman sees the order flows, and being experienced traders know where the the cover point are. they buy heavily to cause covering and then sell hard when the price has been driven up. they have been playing this game for months with your tax dollar, and getting a huge bonus from it. rinse wash repeate.
My wish is that someone would take the time to spend years reading, investigating, reading, reading, reading, etcetera about these matters.
as an alternative, the ZH forums are open to anyone. perhaps you could start one with the topic of "I want to be spoon fed all the information, don't want to put any effort into it, and I want the information to be guaranteed". You might get some responders there.
good luck to you.
That is unfair and not what ZH is all about. ZH is trying to democratize some hidden and arcane aspects of our capital markets. It is in his(their) best interest to do some spoon feeding to build the viewership for those that do not trade for a living but are concerned about our country and their way of life.
I agree the point can be very criptic, and to encourage people to read a bit more dialoge under the captions would be helpful. Not everyone is an active trader or in the indistry, but it is the regular public we want to tell about the abuses so they can understand them, tell their froends and gain some popular traction.
I remember Tyler's manifesto when he forst came on line and hthat was the spirit he endorsed.
I actually wish people would stop shorting so then we couldn't have the squeeze and the market may drop. you can make money by buying uup, or in bonds because treasury rates would fall. there are other ways to win with the market going down that do not allow goldman to manipulate you.
Yes, please don't bother with anyone that would care to peer under the curtain, let's keep everything as close to the vest as possible. Kinda like the FED, now that I think about it.
Brutal response!
But true and needed.
If anyone thinks they can learn technical analysis by going to a $495 seminar at the Sheraton on a Saturday, they are sadly mistaken and out $495.
That's arrogant bullshit, deadhead. The guy just asked for an expanation, that's all.
I just read and re-read until I get it. All of the selling yesterday produced a price drop, which has been completely recovered on 1/5th the volume in just a portion of today.
It is a lovely feature (IMHO) of the market that volume doesn't play a stronger role in price action; one order, at the right time and circumstances, can really move an individual share price. I keep wanting to *think* that an efficient market would "notice" silly low volume moves, and have recovery due to the influx of opportunists. But that more and more seems to be a really dumb way of thinking...
you short yesterday and hold overnight and got burnt!
patience prevails. at least until 2:29:59 you still have a chance to get out!!!!
Momentum not following price ?
This is a bit like forced sellers at the March lows, but now it is the bears that are being caned
Tyler if you look at SPY IGPV, its on track for a normal session. Quit misleading people.
What exactly is misleading? The chart?
volume didnt explode this morning. Volume is U shaped, its always busier in the morning and the close.
Just put up a chart of SPY eqty IGPV go. It shows you whether volume is higher or lower than normal (based on 90 days I think).
I was referring to the green peak in the accumulation volume. Or do you deny that significantly above average volume is significantly above average?
you're just showing 1 day difference. how is that meaningful? If it was outsized compared to the last 30 days, yes.
that's the whole point- i am comparing two days' action to the average volume trendline
It took 135 million shares to push the market down yesterday, but 1/5 of that to bring it back. That is not a headscratcher to you?
....such a way with so few words TD. True brilliance is boiling down massively complex matters into less than a sentence. You do have that.
as always, thank you so much for your efforts and willingness to share.
Deadhead, maybe you could give him a reach around?
Tyler, can you explain what "Accum Volume Diff" is measuring, and how it measures it? I assume it is a running cumulative count of price move times volume for each minute, but that is just an assumption.
Perhaps somebody out there already knows the outcome of the FED meeting. I wonder who that could be?
perhaps this is merely yesterday's POMO money coming in. after all, they screwed the pooch yesterday with the transaction, didn't they? and it was becoming awfully predictable, wasn't it?
Volume spiked at 10: 15 AM and has fallen since.
The shorts are loosing theirs
just when you think its safe to dip your toe into the water(short) the bullsharks bite it off.
Bite your whole bloody legs body arms and head in one swift mouthful before you can blink
along with Bank of America, they want to get rid of all that street level glass.
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Another round of QE and dollar bashing from the FED perhaps, that seems to be what the market is saying. Makes sense after the UK BoE QE expansion.
to the people who criticize TD's posts:
Go somewhere else...you obviously don't get what is being said here. It's not about being short or long...it's what is being done to the market. Wake the hell up...or turn on CNBS if you want your information "Sifted" for you.
Critical thinking is not being critical....we have the yahoo boards for that...
MS
oh, the irony!
You should be able to short useless junk without getting squeezed but can't just because the gov changes the rules and makes your borrow called in at short notice so you are forced to cover
yes, dumbass newbie shorts should be guaranteed to make money with no risk! viva la revolucion!
but dumbass longs doing the same thing is ok? STFU
MS
only dumbasses classify themselves as "shorts" and "longs". it's like ... so junior high.
+1
should say "not just being critical"
there is that ok for you Mr. Irony?
MS
I encourage criticism, valid or not. Keeps ZH honest. Everyone is entitled to voice an opinion. Doesn't mean you have to agree wif it
Guest (to the fed): Don't gibe a damn about you being SPARTA, you can hide but you can't run:
http://www.bloomberg.com/apps/news?pid=20601087&sid=axsovog3CuAE
all kneel deflation!
sorry for triplets...
"SPARTA" = ?
I'm guessing it's an acronym for "SubPrime And ..." something. What are the last three letters?
http://www.bloomberg.com/apps/news?pid=20601087&sid=axsovog3CuAE
http://www.bloomberg.com/apps/news?pid=20601087&sid=axsovog3CuAE
Green shoot... it is the bottom
Can somebody let the canadian bots know about these tricks.. I saw it written on the wall yesterday and acted accordingly, except that this morning they did not follow their american brothers and did not pump up, bastards.
Expect another spike once the hyped up by 1x juiced effects from the gas and cluncker retail sales mirage hits tomorrow... that will really test shorts stomachs... me, I'll keep selling the tail these create
I'm holding on to my shorts. My fashion model's telling me that the markets are going to take quite a hit this afternoon after the Fed announcement. Sometimes you need to be brave.
I am watching China, the largest indicator of Green Shoot mania - patience your best friend.
Going short against the FED's trading machine seems like pissing against the tide the last few months.
It seems as though a lot of posters are unclear on certain terminology that TD uses (everday stuff in trading), but there is a website investopedia (.com) that explains almost every financial term you can think of w/ examples of them in use. Like another poster said, do your research before asking questions, and if you can not get an answer then post the question. And NO, i am not trying to plug some website for people to go to.
Thanks TD for all the great info. We really appreciate the unbelievable insight into how irrational these markets truly are.
Thanks for the tip! Good info with no condescension or hostility, it speaks well of you.
the only financial term you need, abc = always be closing!
-covering
yeah, you don't want to be holding their hand when the inflation genie is so big that even the dunderheads on CNBC might have to acknowledge that prices are rising.
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