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NYSE Rule 48 Invoked
After the December economic collapse (in the US, UK and China) was blamed entirely on this stunning for the winter phenomenon called snow, it is time to dump the market's problem on it too. The NYSE has just invoked Rule 48. Please, like we are supposed to believe there are still humans trading Bernanke's monopoly board.
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footnote to Rule 48
smash down PMs for no reason when negative news comes out and you are trying to make $ for JP
Not exactly "no" reason. Today is futures expiration. With options and futures expiring the last week of every month, the EE tends to pull a smackdown in price around that time. This downturn will be over by tomorrow evening at the latest. Silver is holding up relatively well, I might add. Still above the level where I bought yesterday, thinking the BoS was on the scene (might still be, but he is focusing on silver only right now if so).
Today is futures expiration? Are you sure?
I thought options expirations were the Friday of the 3rd week of every month.
~Misstrial
No, gold and silver options expiry was yesterday, gold and silver futures expiry is today.
http://www.heritagewestfutures.com/downloads/futures-options-calendar.pdf
OK, thank you for that info and for the calendar link.
~Misstrial
tmosley could you explain to me what that means and how to trade it? it's always eluded me and I trust your insight, judgement and intelligence. Thanks!
Basically, arbitrage the price between the end of options/futures expiration week and the week prior to the next options/futures expiry, which generally approximates the monthly top, absent other driving forces (which are legion at this point, so be very careful).
Note that I do not use this knowledge to trade, so it is untested. Rather, I have used it to adjust my cash flow such that I have the largest amount of available dollars during OPEX week. I then have the option of buying (which I always do). This should cut your cost average by about 50 cents over the course of a year. You will make about double that if you trade it, but there will be greater risk, of course. If you are going to trade, you need to have these dates circled on your calender, along with FOMC minutes releases, and unemployment numbers at a minimum. These days generally mark inflection points. If you can read the signals, you can know which way the inflection will go beforehand, and use that to your advantage (Andrew Maguire described the method for doing this). In addition, you should read Turd Fergison's blog, along with Harvey Organ. The former will help you to understand the short term actions of the EE (ie they paint charts to try to get algos and momo traders to do their work for them, understand that standard negative indicators are generally fake, especially at shorter time scales, but you can make money off of their painted movements if you recognize them quick enough--suggest trading this on paper for a while until you get the hang of it), and the latter will help you to understand the fundamentals of the market (which at this point are so strong that I don't bother trading, despite my apparent understanding of the markets). If you are going to trade, I would suggest you keep a physical hoard of gold/silver in addition to whatever funds you have in your brokerage account. Consider that as gambling money.
Keep in mind that things could easily fall apart so fast that your profits will be worth nothing by the time you are able to cash them out and sell them for real money. Whether this means overnight hyperinflation, or a slower hyperinflation over the course of a long banking holiday, or imposition of "windfall" taxes on your profits. I can buy dollars with my gold or silver within 15 minutes at any of the local coin shops, or take a ~10% hit and sell it at a pawn shop if I must, also within 15 minutes. Getting your money out of the market, however, can take several business days, and the banks can issue holds on funds at their discretion, at every step of the way if they want. Worst case scenario, you might have to wait two or three weeks to get your money, and that's without the imposition of a banking holiday, and your branch might not even have the cash to give you when they finally release the funds. So keep all that in mind and more than anything BE CAREFUL. Things are a lot worse than they appear.
The physical demand is extremely strong in Asia, especially in China. Next Monday is the first notice day. All the speculative longs must liquidate by this coming Friday. Let's see what will happen.
nononononon, they invoke Rule 48 because they think the maket could rocket up to many thousands of points.
another reason could be because one of the 2 POMO guys called in sick today...
WHO KNOWS!! RIEN VA PLUS BABY!!!
When dealer restocks, he shorts paper vs the physical to lock in the premium. This is partially the holiday buying aftermath restocking surge in PMs and partially the speculators riding the cycle. That is why the downturn is only only in gold and silver and no where else. All it shows is that the public bought a lot of gold and silver.
What do you mean by locking in the premium? Silver is in backwardation now. How can dealers lock in the premium?
Lets say you are dealer. You buy 100 American Eagle silver coins form the mint for $25 each. You mark them up to $30 for resale. Then you short 100 shares of SLV at or some other paper silver at the same price you made the purchase. The only thing you have to worry about is selling the product. Your premium is locked in. That is how a coin dealer operates. They don't care what the price does. Then when they sell their product they take the paper hedge off. The result is pressure on paper prices, but physical drainage. The aftermath of the holiday season results in a lot of restocking occuring at the same time.
less the cost of the short, but that is probably minimal.
Yeah. It gets pushed to extremes by speculators in the process. But cheaper prices bring more buyers and more physical drainage. And in the end, the shortage of metal will dictate the price in an explosion that no one saw coming because it came directly out of a paper selloff.
OK, I see your point. But the coin sales in Jan still keep rising. That's already after the Dec holiday season. I really doubt about the restocking theory.
You are right. But the dealers buy from the mints, not the COMEX/NYMEX. Just wait until mints complete the cycle by taking metals from the COMEX or metals that should have gone to the COMEX but now won't while the dealer hedges are coming off.
I am just saying there is a slight seasonal factor that people exploit and what part of it is. The paper market is for hedging physical buys. And it can do the opposite of what you think in the right cycle for a short period of time.
I presume you are speaking of the primary dealers getting their inventory from the Mint, as opposed the the general bourse dealer. The bourse dealer will buy from any source, and there are a lot of monster boxes of Eagles not yet cracked open. Distribution of the Mint products is still not as dispersed as would be needed to indicate a "common man" interest in PMs. Most dealers have a good handle on this so they make a good source for determining any top in metals retail prices. Today: There ain't one.
Well, I don't know. Copper's down. Have you looked at FCX lately?
~Misstrial
FUNPLOYMENT FTW!!!
rule 48? buy the flipping dip?
don't forget rule 47- if dow futures red, re-route sell orders to NYSE latency slow lane.
Holy smoke people! Slow it down! This is just hours into today. Th efan is already looking pretty spotty.
Feel like I'm looking over the edge of a cliff here.
Base Jump ahead!
ORI
http://aadivaahan.wordpress.com/2011/01/26/a-ha-ahahaha/
Well, and that was THAT! I hope, some day, the building @ WS and Broad will be turned into a museum, the banchero-fraudsters are in jail and HFTs are frying in HELL! But..its just a dream folks, saint-happening!
What the heck? What's up? Guess I'll go check the world news on the intertubes..........
Nothing to see here. Move along...move along.
I don't believe anymore that the stock market can drop; regardless of news. Considering the market moves over the past couple of months I wouldn't be surprised if the VIX ends the day at 15.25.
Your just hating on Obama because he is so damn business friendly. Enough with the class warfare jackass. It never works!
As I called earlier this market is going to rocket into the 2012 elections.
While I am no bankster lover or Fed booster, I agree. .Gov cannot allow true price discovery since that might mean a significant downturn. That would implode all pension funds and remaining 401K investors - the end game. The Fed will levitate the market until the bitter end and create some wealth effect in the interim. The fact is: With the large multinationals unconcerned about US jobs and the banksters only concerrned about extracting any remaining useful capital from the system, there is no organic growth or - hope.
Santa Claus
The Tooth Ferry
Bond Vigilanties
None of them really exist.
+FED's balance sheet.
Commander Cody
You think The Fed can levitate markets? Let's re-cap on their ability to achieve their aims with QE1 and QE2
1. Support house prices (FAIL - they continue to sink)
2. Hold down rates (FAIL - they continue to rise)
3. Stimulate the economy (FAIL - it continues to contract)
4. Reduce Unemployment (FAIL - it continues to rise)
5. Trash, sorry devalue, the Dollar (FAIL - it continues to rise)
6. Stimulate the Stock Indexes (Mixed Result)
There's simply no better contrary play than betting against The Fed. Whatever these crones try fails with unerring certainty.
http://www.youtube.com/watch?v=STlJW0uv4DY
Obama's 2012 re election campaign video.
"I gave you Change, Nigga!"
....dudes, it's just so the last few suckers have the ability to top tick NFLX at 100 times next years earnings. They need to open the sucker up in timely fashion for no other reason.
No worries. The bernank's caribbean
crew maintains a permanent bid on
everything.
I know it is an anomoly to have the futures in the red before the bell, even if ever so slightly, but what is the reasoning for invoking rule 48?
It provides cover under fire for the guys on the inside
Must be the Bat in the belfry!
ES http://99ercharts.blogspot.com/2011/01/es_27.html
Edit: SPX http://99ercharts.blogspot.com/2011/01/spx_27.html
http://www.zerohedge.com/forum/99er-charts-0
OK. Here's that Rule 48 text.
Well, it's not like anyone could predict that it might snow in the winter.
Well...someone just unloaded huge on the Roach Motel [SPY]...over 4 million shares at 129.70. This should be interesting. It was probably due to snow.
ok i get it its to prevent a collapse, of prices on the market, but what has happened? a bunch of poeple put sell at any price orders in over night?
whats the stimulus to this event, the markets devestated and no one knows?
or is it a practice run to see if they can get away with it?
or is there a law comming to vote today that the banksters dont want past and are just having a show of strength to make sure it goes their way
im at a loss to why any ideas?
It would be cool if it was based on the algorithms of the HFT's that are preprogrammed to react to specific data points within an acceptable tolerance that failed based on premarket data (especially all the confusion over the real durable goods numbers) and, because of the snow conditions, it became clear that there wasn't enough time and manpower to make the needed adjustments to both liquidity and the algo's before the market opened so the referee's called a time-out, Time-Out, TIME-OUT!!!!
To make sure there is no market volatility, ON THE WAY DOWN THAT IS!!!!!!!!!!!!!!