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A Three-Month Flat Market? Yes...If You Exclude The Constant After Hours Manipulation

Tyler Durden's picture


Anyone looking at their 401(k) portfolio performance since the end of August will undoubtedly be very happy (and extremely surprised), as the market has climbed steadily higher despite i) increasingly declining trading volume and ii) consistent and material withdrawals from domestic equity mutual funds. Furthermore, if anyone was merely looking at the trading action in regular hours, one would think there was absolutely no profit made since early September. The reason for that: all the upside since September 14th has come exclusively from after hours action. The chart below demonstrates the relative performance of regular hour trading in the SPY as well as that in the extended session. The notable observations: gaps, gaps, gaps. Every single day, minimal volume pushes the futures index higher. Good news, bad news, it don't matter to the Goldman S&P and Russell 1000 futures desk: they just lift every micro offer, giving the impression that the market is unstoppable, often leapfrogging each other as the latest viagra'ed GDP or unemployment rumor is spread. Come morning, it is time for the HFT brigade to come in and scalp their trillions of pennies while leaving the market unchanged, then at 4pm handing it off again to leveraged futures manipulation and dark pools. In a nutshell, this is the secret of the past quarter's phenomenal market performance.

A longer-term chart highlights the regime changes since the March lows, when for several months in a row, regular hours would carry the broader market higher, then would flatline, and let the futures trading desks take over. Rinse. Repeat. That way both the HFTs and dark pools end up happy.

The observant among you will immediately realize what this implies: not only is there no volume breadth to the recent move in the markets, but the actual push higher likely occurs on at most tens of thousands of futures contracts on a daily/weekly basis. The fact that literally several blocks of AH trades, used persistently, can move the market higher by 6% over the past 3 months, even as regular trading accounts for absolutely no part of this move, and that the SEC finds nothing troubling about this phenomenon, should be sufficiently telling about how "efficient" US markets have become.

The reason for this focus away from regular hours trading is simple: all After Hours does is provide leverage due to the much shallower trading overnight. Zero Hedge is currently finalizing ES volume data to determine just what leverage the futures desk as JPM and Goldman uses in their interminable push to make the Dow 36,000, working title of "EV/EBITDA = Infinity (Or Better Yet, Negative)? Who Gives A Shit: The Fed Has You Covered", the bestseller it was always meant to be. 

chart h/t CreditTrader


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Wed, 12/23/2009 - 14:01 | 172780 Sancho Ponzi
Sancho Ponzi's picture

I don't usually push anyone or anything, but if this country can make it to 2012, there is now real hope for the future.


Wed, 12/23/2009 - 14:12 | 172793 ghostfaceinvestah
ghostfaceinvestah's picture

Thanks, I will look into this guy.

I think it is important for people to realize that there are a lot of decent people who are running for office, if they can only get through the party machines.  I have given a lot of money to Schiff's campaign, as well as Rand Paul's campaign.  That would be a huge victory for the country, to get those two into the Senate in 2010.

If you really care about the country, do your part to support candidates like these.

Wed, 12/23/2009 - 14:29 | 172814 Cognitive Dissonance
Cognitive Dissonance's picture

It's the media blockade any non mainstream candidate needs to hurtle. While we can argue over who controls the media, the fact that Ron Paul was blatantly ignored by the media (in particular the non invitations to the last few and most important staged "debates") speaks volumes.

Any candidate who poses a credible challenge to the two party system will be pushed aside and marginalized. The powers-that-be will never ever make the "Ross Perot" mistake again.

Wed, 12/23/2009 - 14:44 | 172825 Sancho Ponzi
Sancho Ponzi's picture

There is no stopping a mandate for change. The media will do its best to discredit and ignore, and it is our job to vote and make them fail.

Wed, 12/23/2009 - 17:33 | 172850 Cognitive Dissonance
Cognitive Dissonance's picture

Sancho Ponzi,

I agree with you. It is we who hold the power and it is our job to effect change, not the latest puppet or pretty face offered on the idiot box.

Unfortunately the vast majority of people get their "facts" and most importantly "opinions" from the TV, not from any real independent thought or analysis of the situation. And the more desperate people become, the more they will turn to the devil they know for marching orders and comfort.

Just because you're awake, aware and energized doesn't mean everyone else is or will become willing to be so. After 50 plus years of Pavlov's dog fear conditioning via the TV, as silly as it sounds, the American public is suffering from a unique form of battered citizen post traumatic stress disorder and will not welcome change if that change requires they handle any responsibility at all, particularly the responsibility to make a choice between the devil they know and the devil they don't know if they then must live with it.

It's so much easier to suffer the slowly increasing daily indignities of the current corruption and slow emotional starvation than to take a chance, no matter how small, with real honest to goodness change, the type that comes from within. The problems we are experiencing are psychological in nature and no amount of social engineering will make a difference until and unless we-the-people decide we are ready to face a brave new world. 

The people have always had the power. They have consciously decided not to accept the responsibility that goes along with holding the power and have instead farmed it off to someone, anyone, who is willing to do what they clearly are not willing to do. We need a type of activism that starts at the local level, where I'm engaged. We must knock on the doors and coax people outside, away from their TVs and PlayStations and back into the real world.

I've been talking to people in my small community for 3 years about family first, community second, mostly to blank faces and bewildered expressions. It took the recent snow storm to drive the point home. As people began to recognize that the best way to get through the 2 days (until the main road was plowed) was to work together, it become easy to get gangs of men and women together to go from door to door to shovel each other out and make sure everyone had food and heat.

Until this happens country wide, nothing will change. We must empower locally if we are to take back power nationally.

Wed, 12/23/2009 - 20:38 | 173260 WaterWings
WaterWings's picture

mostly to blank faces and bewildered expressions

Bravissimo! Grazie. You may be planting seeds with some of them. When the last of us finally keep to ourselves, their victory will be complete and the defiant spirit of Orwell will have been extinguished. We have a true hope that there is still a flicker of dissent among our countrymen.

Wed, 12/23/2009 - 22:10 | 173346 Anonymous
Anonymous's picture

10 million crackberries are sold every quarter and probably much larger number of iphones etc. in korea politicians run their campaign broadcasting to handphone users. if you have to rely on the same type of activism and methods via the msm in the past, you have zero chance of effecting change, obama is proof.

Thu, 12/24/2009 - 11:21 | 173629 Master Bates
Master Bates's picture

Text Hope to 62262 for Barack Obama campaign updates!

(Obama utilized mobile devices as well)

Wed, 12/23/2009 - 16:17 | 172957 Hammer59
Hammer59's picture

I agree with you, and it is a shame that MSM railroaded both Ron Paul and Dennis Kusinich, but I believe that Obama has proven that the Democrats are as worthless and counter-intuitive as the Republicans, and that the MSM is no longer to be trusted itself. If candidates from the various parties outside of the corrupt two-party system cannot capitalize on this current opportunity (a furious electorate), then they dont deserve to govern. Hopefully we have learned something from electing a complete sell-out.

Wed, 12/23/2009 - 16:22 | 172965 Assetman
Assetman's picture

CD... while I'm totally in agreement on your line of thinking, I'm left wondering how the Internet would affect an independent grassroots political movement... if it, indeed, had legs.

The one thing we do know is that alternative media, such as what we see here at ZH, has had enormous success... even versus mainstream media.  The powers that be could effectively block mainstream media access, but in world of Facebook, Twitter, and Zero Hedge-- it's not as if a potential candidate with a compelling message would be totally shut out.

Wed, 12/23/2009 - 17:38 | 173068 Cognitive Dissonance
Cognitive Dissonance's picture

Assetman, I have some interesting ideas as to what is coming to counter the corrosive effects (to the status quo power elite and their enablers, the main stream media) of the independent Internet phenomenon and grass roots movements. I will be exploring this subject in my next few articles, which I hope to have done in a week or less.

Thu, 12/24/2009 - 00:04 | 173443 Assetman
Assetman's picture

That is most excellent, CD.  I'm looking forward to the read.

Thu, 12/24/2009 - 15:10 | 173839 Anonymous
Anonymous's picture

Most people on this site are dilusional, as they fail to understand that WE don't have ANY REAL numbers. How many people do you think actually participate in the Zero Hedge community? Several thousand? And how many of those actually have anything of substance to add to the conversation? Maybe a hundred or so?
Anyone who actually thinks that we can start a grassroot movement to change anything in this country has a hole in their head. It really is quite simple, there are haves and have nots. Every citizen of every other country understands this. In America, we are simply waking up from the lie that either the haves didn't exist or that if you worked hard enough you could become one to. Now, since we didn't get as big piece of the pie we thought we were entitled to, everyone is pissed, and understandably so. But, guess what you're simply motivated by greed because the change you want, involves bettering your own situations, and the change the haves want, is to make it harder for the have nots to stop them (oh by the way, if you're merely a punkass millionaire, you ain't a have, I found that out already).
So, what good do you think you are going to bring about with your change. The system is broken because of your attitude of entitlement, we all spent more than we had, and everyone us thought and still does think we need more. Fuck off, everyone of us lives better than John D. Rockefeller. Be happy that you live in a place where the haves have afforded you so much.
If you want change consider what happens to that lifestyle, no more clean, running water, no more electricity, no more international trade, none of it, ALL GONE. Because the change you wants, demands that we force out the lies of our government, which would only accomplish what everyone already knows, we're busted! So, what good is your movement going to do anyway, except set you back to the dark ages as the haves fight back, and fight back they will. You don't stand a chance.
You want change, get educated, educate those around you, and then practice moderation and stop feeling so God damned entitled to everything in the world. Over 4 billion people go to bed hungry at night and you don't see them revolting, stop your fucking whining because you can't buy another Cartier, Rolex, Benz, BMW, McMansion, vacation house, etc. Your life is so much better than you can imagine. Focus on that and stop being such a little whiny bitch about how you've been robbed. Fuck off, the only reason any of us had anything is because the haves gave us some of their wealth, did you ever stop to think that someday they would want it back?

Fri, 12/25/2009 - 02:59 | 174115 Assetman
Assetman's picture

That is perhaps the funniest, most incoherent diatribe I have EVER read on ANY blog, let alone Zero Hedge.  And I've read my fair share.

Kudos to you, Anon-- you are my favorite poster! :)

Oh, by the way... most of us looking to become more politically active are not whining about the prospect of having our own wealth taken away.  In many respects, we got ourselves in this position... as you so rightly suggest.

No, those of us who are actually informed are waking up to the reality that our children and grandchildren are going be the ones who are going to be royally screwed.   This is much more than just "living in moderation", which I can accept with honest brokers running our country.  It's subjecting the next generation to much worse social and economic conditions than most of us have seen in our lifetimes.  

What has made our society great is a solid and populous middle class that has been bestowed generous individual freedoms.  With the direction our leaders our heading us -- THERE WILL BE NO MIDDLE CLASS, AND THERE WILL BE A DECLINE IN INDIVIDUAL FREEDOMS.  Perhaps you may think that it's either not possible, or that it's preordained.  I certainly don't... because the evidence already points in that direction.

But thanks for the advice for us to keep quiet and keep taking those red/blue pills.  While you enjoy your own relative wealth in the here and now, I'll be preparing others for a very uncertain future.  When (if) the light turns on, you're more than welcome to join us.


Thu, 12/24/2009 - 15:52 | 173865 ATG
ATG's picture

See Frank Capra Eddie Arnold Gary Cooper

Barbara Stanwyck Meet John Doe stuff.

Good movie confirming the Great

Depression was still going strong in 1941.

Curl up with it over the holidaze: 2:02

Wed, 12/23/2009 - 14:46 | 172831 Sancho Ponzi
Sancho Ponzi's picture

This guy is the real deal. He's fiscally conservative, knows the private sector, and is socially moderate to liberal. If you want to know what kind of president he'd make, just look at his record as Governor. 

Wed, 12/23/2009 - 15:15 | 172867 Pelosis Usless Brain
Pelosis Usless Brain's picture

Great! Just what we need is another "socially moderate to liberal" president. No thank you. Between Carter and Obama I've had about all the redistribution of income I need in one lifetime. How about we go the other way for awhile with someone like Ron Paul.

Wed, 12/23/2009 - 15:24 | 172882 Sancho Ponzi
Sancho Ponzi's picture

Let me rephrase: He doesn't get off on telling people how to live their lives. To me that's a big plus.

Wed, 12/23/2009 - 16:06 | 172940 Lux Fiat
Lux Fiat's picture

Indeed.  For those of us who are fiscally conservative, of a secular bent, and believe that gov't intrusion into private lives should be minimal to non-existent, the pickings have been slim to none for a very long time.  Many of the tea party  and other non-"main-stream" groups are on the right track fiscally, but more than I care to see check the idea of a secular gov't at the door.  Not sure that Gary is my guy, but he has interesting positions on many of the issues.

Wed, 12/23/2009 - 17:05 | 173020 Assetman
Assetman's picture

How picky do you want to be?  Would you rather have a tried and true Democrat or Republican as a substitute?  Besides a few exceptions I can count on exactly one hand, I will not vote for any incumbent for political office... and will only reluctantly vote for a Democrat/Republican if there is no other viable choice.

The central issue is that the Democrat/Republican choice is one in the same, in that corruption is well entrenched in both parties.  Any candidate willing to make a concerted effort in pushing for meaningful political and economic reform with a bent towards greater libertariamism has my undivided attention.

Wed, 12/23/2009 - 17:39 | 173072 Lux Fiat
Lux Fiat's picture

Agree that both major political parties have utterly failed this country.  Voters, by their ballot decision-making (or lack thereof), have had a major role in making that happen.  My voting is based on a number of criteria - with the overriding one being to what extent will the proposal or candidate reduce the size and scope of government, and work to put this country back on a long-term economically sustainable path.  It's been years since I voted for any bond proposal.  But that doesn't stop myopic voters from passing them by wide margins.

As a result, I have voted for a number of candidates (both major party and independent) over the years who did not share my secular views - as personal liberties and freedoms won't count for much if the economic pie that most politicians seem so he!!bent on divvying up disappears.  Guess I'm picky, but a realist at the ballot box.

Wed, 12/23/2009 - 20:41 | 173262 WaterWings
WaterWings's picture

When one takes into consideration the track record of congressional incumbents, I can count the reliable (dedication to the true letter and spirit of the Constitution) congressmen and women with one finger.

Thu, 12/24/2009 - 00:10 | 173449 Assetman
Assetman's picture

And which finger would that be, WaterWings? :)

Wed, 12/23/2009 - 15:42 | 172906 Anonymous
Anonymous's picture

When will the reactionaries get their own original idea? We've been waiting since the late 18th century...

The party of "No" only finds relevance when wearing jackboots. Screw off.

Wed, 12/23/2009 - 16:39 | 172986 Sancho Ponzi
Sancho Ponzi's picture

The smearing has started. Let the games commence...

Thu, 12/24/2009 - 18:47 | 173939 ATG
ATG's picture

And note which side of the aisle did it...

Wed, 12/23/2009 - 19:43 | 173206 Anonymous
Anonymous's picture

When men gather in order to create a sort of secret combination of collective strength, and when they do so in order to draw power and gain to themselves, and when they do so by plunder and dark arts, and find no restriction or legal restraint, they multiply like a leper colony.

They will suborn all the high men in high places until the system is one of plunder. Then all is brought low as there is no incentive for honest work, no reward for lives well lived.

Where once was a land of bounty, there can soon be a land of desolation. And that within a twinkling of the eye.

Riches of man exist only so long as true law, honest labour, and strict morality prevail. Once lost, Shangra La can be consumed in short season.

Wed, 12/23/2009 - 23:51 | 173437 PD Quig
PD Quig's picture

The party of "no"? Yes, the party of no more stupid-assed ideas that have already failed for forty years and in twenty other countries. I'm a libertarian-conservative, and abhor much of what went on for the past eight years (and for that matter, the 40 years before that), but the apotheosis of corruption, incompetence, and economic idiocy displayed since January 2009 is stupefying.

You want to see jackboots, check out your Chicago crowd, homie.

Wed, 12/23/2009 - 16:57 | 173009 ghostfaceinvestah
ghostfaceinvestah's picture

Clearly you don't understand the difference between "social" and "fiscal".

Wed, 12/23/2009 - 23:08 | 173394 loki
loki's picture


Thu, 12/24/2009 - 18:55 | 173943 Anonymous
Anonymous's picture

So can you actually detail to me how Obama has redistributed income? Or do you exist just to blow smoke up people's asses?

Wed, 12/23/2009 - 15:35 | 172896 WaterWings
WaterWings's picture

If we make it to 2012 all you'll have to do to win is mention that your opponent has 'considered cutting welfare'. With 100,000,000 waiting for the WIC to arrive each month you can bet they'll vote en masse.

Hell, the postmaster general will be the most popular candidate: "And I promise, through snow, wind, and tempests, each formerly-hard-working American, and anyone else that needs them, will receive their assistance in these hard times. We don't let people starve in America. Every family will have food on the table. I personally stand by that."

To be serious, however, Johnson does look like a good candidate. He'll have to jump over Romney and Palin somehow. Dr. Paul is easy to marginalize because he talks too straight. The question is, will the elites approve of Johnson? Bush II got a second term. Obama got the Nobel Prize. My nerves are all shot now - I wouldn't be surprised to see Palin in the Oval Office.

Wed, 12/23/2009 - 15:44 | 172909 Sancho Ponzi
Sancho Ponzi's picture

Hell, you won't need a Postmaster General. The checks will be direct deposited into your account at the government owned Bank of the United States of America. Of course they will be free to withdraw from said account for health care, carbon tax, etc.

Wed, 12/23/2009 - 16:14 | 172954 WaterWings
WaterWings's picture

Oh snap! Major curveball. Mandated direct deposit withdrawals. 

The Fed giveth, and taketh away. BTW, is your avatar Jesucristo?

Wed, 12/23/2009 - 16:25 | 172968 Sancho Ponzi
Sancho Ponzi's picture

Hardly, that's Edgar Friendly. 

Wed, 12/23/2009 - 16:26 | 172971 Sancho Ponzi
Sancho Ponzi's picture

Of course who am I to say Edgar Friendly isn't JC.


Wed, 12/23/2009 - 16:40 | 172989 WaterWings
WaterWings's picture

Dewd! Double avatar of the month! Denis as the Jesusunderground.

Thu, 12/24/2009 - 11:26 | 173632 Master Bates
Master Bates's picture

Palin in the Oval Office?

"I can see Alaska from my house, also, don'tchaknow."


Thu, 12/24/2009 - 12:27 | 173671 baldski
baldski's picture

He sounds like a right wingnut to me!

Wed, 12/23/2009 - 15:38 | 172901 Anonymous
Anonymous's picture

I'd agree on Schiff but for one other candidate, Linda McMahon. Bottom line, anyone but Dudd.

Thu, 12/24/2009 - 17:02 | 173891 Anonymous
Anonymous's picture

If you REALLY give a shit then don't vote for ANY incumbent
ever again until the messes are straightened out. The corrupt
S.O.B.'s will never term limit themselves so we must do it
for them at the ballot box. NO MORE CAREER POLITICIANS!!!

Wed, 12/23/2009 - 14:27 | 172808 phaesed
phaesed's picture

"but if this country can make it to 2012, there is now real hope"


Heh, there are so many doomsday jokes that could be made for that.... I'll instead go with

Wed, 12/23/2009 - 15:48 | 172915 Zippyin Annapolis
Zippyin Annapolis's picture

Ha ha ha ha the Spanish Inquisition--indeed---it warms the cockles of your heart--ain't history grand?

Wed, 12/23/2009 - 14:28 | 172809 Careless Whisper
Careless Whisper's picture

@ Sancho   excellent choice. he is certainly right on most of the issues.

Wed, 12/23/2009 - 15:12 | 172860 Sancho Ponzi
Sancho Ponzi's picture

He's more electable than Ron Paul, IMO. The right wing fringe won't approve of his views on drug legalization, and the left won't approve because he sticks to a budget and has integrity. To me, that makes him just the man for the job.

Wed, 12/23/2009 - 17:02 | 173018 Dburn
Dburn's picture

The notion that there is a left and a right should have been put to rest in the last 9 years.

One proposal I saw was that all US politicians have to wear NASCAR Like Jackets with the logos of their main sponsors on the Policy Jacket with smaller logos distributed on the "earmark" pant legs.

I think that would be a brilliant idea. We have some sort of convoluted corporate monarchy with a multitude of different kingdoms that sometimes are at war with each other and sometimes form temporary coalitions if their products and profit goals are complimentary.

All out war has been averted as each sector waits it's turn at the taxpayer trough supplemented by the Fed's printing presses (" Don't worry guys, enough for everyone") for groundbreaking policy that give out an illusion of providing for the population which helps the Political Sector (which soon will come to you at pre-ipo prices thanks to Goldman Sachs) but are purposely filled with Loopholes that corporate lawyers could drive tanks though and they do.

Each bill I have seen come out in the last year has been a negative for taxpayers but a huge push to the bottom line of various sectors and sub-sectors.

Why in the world would someone actually try to market a product when Businessweek came out with a study that lobbying bribes had 12:1 return for every marketing dollar spent.

I'm surprised that CEOs don't mention their lobbying budget with more fanfare. "In Q2, we cut our advertising budget by 90% and increased our Bribe budget by almost 200%."

"Wow, way to go guys, could you put a little color to that" "Sure, I'll leave that to Bend-Over Smith , the newest member of our team who is a RoL (Rule of Law) Marketing specialist"

"Well we took a look at the investments the Health Insurance companies made to get a 50% increase in customers by selling even more worthless product and still keep their anti-trust exemption"

Clap Clap "Brilliant"

"Thank-you. We feel when can the govt forces people to buy our fuel efficient Yugo automobiles now built almost entirely in Vietnam,with former eastern block engineers overseeing quality control, we can literally own the car market at a unheard of 70% gross margin".

"Yes, but have you ever sold cars?"

"No, but the insurance companies never sold insurance have they?"

"AHHHHH, Brilliant , just brilliant"

Next Day "Strong Conviction Buy on Radio Shack. we feel the price should easily go up 1000% by the end of the year" GS Research.

That's what we are into these days. So in candidate selection, one should be able to see if they are sponsored by the products that you trust the most. It shouldn't be too hard of a leap. This cut in credit may be problematic, but that's why the Fed is there. Look for Fed MasterCards with Unlimited credit, zero percent interest and no minimum payment coming to your mailbox soon.

Some seriously Bad health insurance and that Radio Shack puke green Yugo will soon be yours.

Wed, 12/23/2009 - 14:56 | 172836 Unscarred
Unscarred's picture

@Sancho Ponzi,

Two more to keep your eye on:

1) Texas governor Rick Perry

Six years ago, Mr. Perry's state underwent a critical tort reform that was codified in the state constitution. The payoff is that Texas is now outpacing California economically. According to the Texas Public Policy Foundation, between 1997 and 2006 Texas' economy grew an average of 4.3% while California's grew at a rate of 3.7%. But as of 2002 (to 2007), with tort reform in place, Texas' annual economic growth jumped to 5%, while California's remained essentially the same at 3.6%.

2) Indiana Governor Mitch Williams

President Barack Obama eked out an upset in Indiana last year, but Mr. Daniels's re-election was almost as notable. Amid a Democratic wave, the Republican beat his opponent by 18 percentage points and received more votes than anyone who had ever run in the state. He swept 79 of 92 counties, nearly 60% of independents and 25% of Democratic voters. His approval rating is near 70%.


At a time when the GOP has done so much wrong, strategists are asking what Mr. Daniels is doing right. Hoosiers would point to his tough fiscal discipline and his overhaul of state government.

Wed, 12/23/2009 - 15:00 | 172844 Sancho Ponzi
Sancho Ponzi's picture

I'm not sure Rick Perry has the intellect for the job, although he'd certainly be an improvement over what we currently have in office. 

Wed, 12/23/2009 - 15:11 | 172859 Unscarred
Unscarred's picture

Unfortunately, the days of Thomas Jefferson-caliber Presidential acuity have long past.  I'm still trying to understand how Bush got elected, let alone re-elected.

Wed, 12/23/2009 - 15:48 | 172917 Humble Gentleman
Humble Gentleman's picture


Thu, 12/24/2009 - 11:31 | 173634 Master Bates
Master Bates's picture

Just look at our popular culture for your answer.  For example, the most popular guy on the show "Pawn Stars" is the big fat dumb oaf guy.

America = dumb
Bush = dumb

Palin = dumb

Therefore, Palin will win in 2012, unfortunately.

Obama = smart, with bad policies.  Yet, we all see how that one worked out...

Wed, 12/23/2009 - 15:03 | 172848 Anonymous
Anonymous's picture

Good Lord, buddy, Rick Perry is a buffoon. I am a conservative Texan and there's no way I'd vote for Rick perry. He wanted to shoot up every girl in this state with Gardasill so his buddy's at Merck would profit. You need to dig deeper than the latest soundbite, Hoss. Perry is a snake.

Wed, 12/23/2009 - 15:15 | 172868 Unscarred
Unscarred's picture

Thanks for the perspective- appreciate it.

Wed, 12/23/2009 - 15:37 | 172898 Sancho Ponzi
Sancho Ponzi's picture

Agreed, Anon. I was trying to be polite.

Wed, 12/23/2009 - 15:05 | 172849 Unscarred
Unscarred's picture

[Disclosure- I swear no allegiance to either party, but the track records of these two individuals with respect to economic policy caught my attention]

Wed, 12/23/2009 - 19:57 | 173214 Anonymous
Anonymous's picture

Being from TX I can assure you that Perry is not ideal. He supported Trans-Texas corridor and vetoed eminent domain bill. Although he is OK compared to Governator, I guess.


Wed, 12/23/2009 - 23:55 | 173441 PD Quig
PD Quig's picture

It's Mitch Daniels. If we can talk him into running. Best governor in America.

Wed, 12/23/2009 - 15:00 | 172846 Anonymous
Anonymous's picture

Bullshit. No politican is going to save us. I'm not going to piss away another four or eight years on some unproven commodity who, as soon as he gets to Washington becomes one of them. Wake the fuck up. They're all the same. As Carlin said, "It's a club...and you and I aren't in it!"

Wed, 12/23/2009 - 15:20 | 172876 Sancho Ponzi
Sancho Ponzi's picture

You, sir, are incorrect. There are a few decent, law abiding politicians, and GJ is one of them.

Wed, 12/23/2009 - 15:42 | 172904 WaterWings
WaterWings's picture

As soon as Johnson says 'change' we'll know the elites approved him.

Wed, 12/23/2009 - 16:28 | 172972 besodemuerte
besodemuerte's picture

There probably are some good politicians out there currently, I won't argue that.

Unfortunately they'll never get past the local/state level with their same ideals.  For it's been proven that once they do, someone kills them.  Simple as that.  It needs to come from the people.

Thu, 12/24/2009 - 08:11 | 173579 Anonymous
Anonymous's picture

And once he leaves New Mexico, and inherits an actual economy, he'll become corrupted by special interests, and stop being one of them.

Have you really not seen this movie before?

C'mon, man.

Wed, 12/23/2009 - 15:14 | 172865 Anonymous
Anonymous's picture

Is this the "real" hope we can believe in, just like what the change we supposed to believe in? Just asking.

Wed, 12/23/2009 - 15:32 | 172889 Unscarred
Unscarred's picture

"You can HOPE in one hand and SHIT in the other, and see which one fill up first."

- One of my favorite lines

I'm really not sold on any of them.  But, IMO, these are two guys who will most likely be contenders when the wheat get separated from the chaff.  I have no idea if that will be a good thing, though.

Wed, 12/23/2009 - 15:20 | 172877 Anonymous
Anonymous's picture


He endorsed Ron Paul for Republican presidential nomination in 2008. Definitely, [Gary E. Johnson is] a good guy!

Wed, 12/23/2009 - 15:25 | 172883 Anonymous
Anonymous's picture

Tyler, any chance you can post charts like those going back farther in time...a decade would be interesting. Even seeing the same effect in a down year like 2008 would be interesting.

Wed, 12/23/2009 - 14:05 | 172783 bugs_
bugs_'s picture

Slight of hand,smoke and mirrors, wink wink

nudge nudge say no more.


Wed, 12/23/2009 - 14:14 | 172796 Brett in Manhattan
Brett in Manhattan's picture

Speaking of manipulation, you recently posted an article on U.S Steel. Take a look at the chart for "X." Since September, it's taken a 30% drop and a subsequent 50% rise. Is this a "normal" trading pattern for a stock of that size during a time of a relatively flat market? 

This also speaks to the SEC piece. Do they ever investigate suspicious price movements like those of "X"?


Wed, 12/23/2009 - 14:38 | 172821 El Hosel
El Hosel's picture

 "Suspicious movements".... Isn't that the CIAs job?

Wed, 12/23/2009 - 14:16 | 172800 ghostfaceinvestah
ghostfaceinvestah's picture

One of the important hidden stories I think is the performance in the bond market.  Basically, it has gone nowhere since 9/30.  Normally this wouldn't be a big deal, but with the underlying economy still cratering, rising asset prices were a huge income boost for a lot of financial institutions.  IBs made a lot of money from "fixed income trading", which is a euphamism for marking up their bond inventory.  Insurance companies showed stability in book values despite deteriorating fundamentals due to increases in their bond portfolio (much of which is HFS, so is marked to market).

Without this articifial support, a lot of financials are going to see post much weaker financial positions than expected, IMHO.

Wed, 12/23/2009 - 14:28 | 172810 Gubbmint Cheese
Gubbmint Cheese's picture


Always look for and appreciate your comments and observations. You still looking for a higher market and higher gold prices? Do you buy into Rosie's (and Gross's) "buy utilities" mantra?

If I don't get a chance to talk to you before.. I hope you have a great holiday!


Wed, 12/23/2009 - 14:37 | 172817 phaesed
phaesed's picture


The moment it appears to the banks that they will no longer be able to prop up the market, they will collapse equities and move us back into Treasuries.

ANYONE who thinks that the bubble is IN treasuries right now will be painfully made aware... This has occurred sooooooo many times in history it's hilarious because each time, investors do the same damn thing.

"Stupid is as stupid does"

"Those who cannot learn from history are doomed to repeat it." George Santanyana

Wed, 12/23/2009 - 15:00 | 172845 Oso
Oso's picture

agreed, medium-term (ie, not day to day fluctuations) yields get crushed.  money has to move out of risk.  The history of every credit contraction globally shows this to be the case 100% of the time.


also, the term "bubble" i think is being used too willy-nilly these days.  "bubble" this, "bubble" that.  gold is not a bubble, it is/was a crowded trade that is correcting.  treasuries are not a bubble, there is more than enough money in risk to bring those yields down.


to the point of this article however, i have been saying it for months:  no profit-minded trader would ever ever EVER trade the globex in the way they have been moving.  It is so painfully obvious the motives are "other-than" profit, and yet the SEC and all the other hoser-idiots "regulating" our markets will only do something if the move is downwards, because that = the devil's work.


btw, Im also think "using" quotation "marks" to "make" a "point" is also over done. :P

Wed, 12/23/2009 - 15:31 | 172888 phaesed
phaesed's picture



Well, using quotations marks to actually demonstrate someone else's words is probably underdone these days ;)

Thu, 12/24/2009 - 18:54 | 173942 ATG
ATG's picture

$14 Bond funds for every $1 Equity Funds

and Treasuries are not overbought?

Wed, 12/23/2009 - 14:18 | 172801 Anonymous
Anonymous's picture

When will this end? Or will it.

Wed, 12/23/2009 - 14:18 | 172802 Anonymous
Anonymous's picture

When will this end? Or will it.

Wed, 12/23/2009 - 14:20 | 172803 Stoploss
Stoploss's picture

It would appear that on some days ES vol is very heavy, interested to see the data.

Wed, 12/23/2009 - 15:02 | 172847 Oso
Oso's picture

my bet is that it is only heavy to the downside as prop-up traders unload risk.

Wed, 12/23/2009 - 14:23 | 172804 Anonymous
Anonymous's picture

I think it is also telling that nearly every Monday morning for the past 3 months that the market is marked up significantly before it opens. Buy on Friday close and sell on Monday open would have been a nice strategy

Wed, 12/23/2009 - 14:24 | 172805 JohnKing
JohnKing's picture

Timmy Says:

We cannot afford to let the country live again with a risk that we're going to have another series of events like we had last year. That's not something that is acceptable. And we will prevent that. We will do what is necessary to prevent that, and that is completely within our capacity to prevent.

Yeah Timmy, juke the futures, let the bots it recovery, love ya man, never change, we'll do lunch.

Wed, 12/23/2009 - 14:46 | 172830 THE DORK OF CORK
THE DORK OF CORK's picture

A little Springtime number just for you Timmy Baby

Wed, 12/23/2009 - 19:58 | 173220 tip e. canoe
tip e. canoe's picture

haha nothin like some mel brooks on a friday eve.

check the fuhrer at 1:00 in this clip:

lord blankfein i presume?

Wed, 12/23/2009 - 14:29 | 172813 Anonymous
Anonymous's picture

What about the fact that many companies announce quarterly earnings after the market closes? Since the March lows there have been a countless number of companies that have beat earnings estimates to the upside. This would account for a spike in buying and short covering in the after hours markets.

Wed, 12/23/2009 - 15:16 | 172870 Anonymouse
Anonymouse's picture

An excellent point Anonymous.  Can't say if that accounts for the difference, but it is a good hypothesis that should be addressed

Wed, 12/23/2009 - 16:22 | 172962 Oso
Oso's picture

why dont you see any real substantial downwards moves then?  lots of companies have missed dramatically, or beaten and moved down.  without fail, though, over night, you wake up and everything is green again.  no, this has nothing to do with earnings.

Wed, 12/23/2009 - 16:26 | 172970 Anonymous
Anonymous's picture

Also, I'd be curious to see what the data looks like in 2008. Remember, we had several days with huge gap downs when bad news was announced after the markets closed. This would lead me to believe that the selling pressure was even stronger during after markets.

If this is the case (ZH, maybe you guys could look into the data), the only conclusion I would have is that when there are sharp moves in the markets, after hours trading simply amplifies the trend.


Wed, 12/23/2009 - 14:32 | 172815 Careless Whisper
Careless Whisper's picture

excellent charts and thanks for pointing out the opening gaps. let's not forget that over night trades are theoretically more risky and this return may be compensation for that risk. on the other hand.... it could very well be after hours market manipulation.

Wed, 12/23/2009 - 14:36 | 172818 Anonymous
Anonymous's picture

Check the longer term graph...I think the information is reversed to make the point that most of the gains come in after hours.

Wed, 12/23/2009 - 14:39 | 172823 Anonymous
Anonymous's picture

You nailed that analysis so nicely. I think also there is an issue of daytrading. They don't want day traders to piggy back on their pump operation. Probably in an effort to convince money managers that it is safe now to go long and forget about it,more or less "building confidence" if you will....

Wed, 12/23/2009 - 14:40 | 172824 Anonymous
Anonymous's picture

yes ppt and others did what they had to do. now , how long can this continue? that is the question.

Wed, 12/23/2009 - 14:52 | 172838 Mad Max
Mad Max's picture

should be sufficiently telling about how "efficient" US markets have become.

KGB-style efficiency.  Maybe that's why Putin didn't want to be President at the moment.

Wed, 12/23/2009 - 14:55 | 172840 Anonymous
Anonymous's picture

Could not a person interested in the close to open returns just buy at the close and sell at the open an etf tracking the S&P 500 or the Dow? Such a move would allow the player to benefit from your observation.

Wed, 12/23/2009 - 15:13 | 172862 Anonymous
Anonymous's picture

Phil Davis has been railing about this for months about how easy it is to manipulate the markets via the futures especially oil.

Wed, 12/23/2009 - 15:15 | 172869 Fidel Sarcastro
Fidel Sarcastro's picture

Haven't you heard?  The one-way buy monkeys on CNBS are calling for mega gains next umm...flat markets aren't possible right?

Wed, 12/23/2009 - 15:19 | 172871 Bear
Bear's picture

Thank you so much for this data gathering. I have watched the ES market (day and night) since 2000 when on a good day the bid may have been 10 contracts and the asked at 15 contracts. I would place an order for 5 contracts and I could see the change in bid or ask totals ... the market would actually be affected by a 25 contract order. The 'big boys' never played the minis as they traded in the manipulateable @SP market. This changed when the ES volume rose during the 2003 uphill grind.

Today the behemoth battle between a 1,700 ask and a 2,100 bid pool has changed everything and watching the markets now is like constant 'Groundhog Day'. One hundred contract orders are so routinely executed that I cannot even see them on the time and trade display.

I think an evaluation of the historical bid/ask pool sizes would be able to prove that manipulation occurs at night and harvesting occurs during the day.

I also have noticed that various commodities (CL, USD, JY, EC, GC, etc.) will act in concert for a while with ES and then go their own way. I have listened carefully to ZH point out these various 'correlation' from time to time while inferring that they (the commodities) were leading the market (ES), but I am now convinced that it is the market that is leading everything both night and day. Who da thunk it?

For a Bear the question has to be asked ... will this punishment ever end?

*** disclaimer *** I have a short position in ESH10 (watching 10,000 contracts move .25 points)


Wed, 12/23/2009 - 15:54 | 172925 Fidel Sarcastro
Fidel Sarcastro's picture

Your right Bear, the change in volume SIZE has been incredible.  The last few days notwithstanding, the ES has been trading "normally" if one is willing to accept smaller gains.  The large orders have been a real benefit to me: they stick out like a sign that screams "BUY HERE."  They are the hedge fund trades...ride their coat tails and make some coin.

Wed, 12/23/2009 - 16:15 | 172953 Bear
Bear's picture

Fidel, have you seen the multiple 100 buys at the bid (or multiple 100 sells at ask) then a huge flurry of small activity following. It reminds me of watching the big fish in the ocean followed by a herd of cleaning fish. Also there are the funds that enter/cancel their 1,000 lot orders to signal the next .50 move. This is not your CNBC, buy and hold market!

Wed, 12/23/2009 - 18:21 | 173126 Fidel Sarcastro
Fidel Sarcastro's picture

Agreed Bear and I have seen it all. I don't pay attention too much to the order book because of the cxl-games you mention; I pay attention to the FILLED trades. I run a chart that shows all filled sizes at the bid/ask. It's awesome because it shows how aggressive the buyers or sellers are with their money & not the BS "bluffing" you'll see on the order book.

Wed, 12/23/2009 - 23:16 | 173401 loki
loki's picture


Wed, 12/23/2009 - 15:18 | 172872 max2205
max2205's picture

C chart looks like it will dump, but this is where PPT will buy like crazy

Wed, 12/23/2009 - 15:18 | 172873 Anonymous
Anonymous's picture

At least if you know somethings predictable you can make money from it.

Wed, 12/23/2009 - 15:19 | 172874 Anonymous
Anonymous's picture

Hate to sound like a "tinfoiler, grassy knoll" guy - but with a quick look at the facts from the change in administration - Obama said something very strange for a president in early March "now is a good time to buy stocks"...and so it was. My speculation is that this administration took an "activist" role in "managing" the market through this crisis. Geithner told our congressmen all it took was will...and so it was. No Geithner says their will be no more crisis. And so it is. The "free market", as it was, is not at present free. Will it be free again (as it was?) of massive fed and governmental manipulation? Call it what you will but the melding of state and industry into one...sorta like religion guiding politics...picks the clear winners and's just up to us to be on the right side w/ the government. That sounds a bit ominous!?!

Wed, 12/23/2009 - 15:43 | 172907 BoeingSpaceliner797
BoeingSpaceliner797's picture

Sounds totalitarian/fascist doesn't it?

Wed, 12/23/2009 - 16:19 | 172960 tinfoilhat
tinfoilhat's picture

Someone call my name?  :)  The manipulation began way before March.

Do you think it's a coincidence that all this happened a few months before the 2008 election:

1. The big IBs raised the margin requirements for their hedge fund clients (forcing a lot of equity selling to cover margins)

2. The NY Fed draining liquidity from the market

3. The mysterious run on money market funds

It's no secret that "Wall Street" donated heavily to Obama.  It makes perfect sense that they would do what they could to ensure their "trade" succeeded.  I also don't believe their backing of Obama had anything to do with ideology, but everything to do with dollars.  Take a look at a chart of bank profits vs US deficit spending over the last 30 years and their choice becomes obvious.

So why would Wall Street support the ramp up in equities this year, making Obama either look like a prophet or a hero?  Well, not a single banker in the thick of the calamity has had a penny of profits clawed back, and none of them are in jail either are they?  Record deficits => record profits.  Win/win all around (except for the American taxpayer serfs.  Sorry.)



Wed, 12/23/2009 - 20:04 | 173224 tip e. canoe
tip e. canoe's picture

the september surprise 

Wed, 12/23/2009 - 15:26 | 172884 Anonymous
Anonymous's picture

Way to state the obvious Tyler.

If it takes an article to inform you of this knowledge, you really are better off STUPIDLY staring at a WORTHLESS 401k statement and wondering how you are going to be able to live until age 90 on the combination of Social Security and 1/25'th of what you think you'll have accumulated by the time you're age 65.

If you're age 35 now, by the year 2040 $500k will afford you an annual withdraw in excess of $20,000! Now work back from $500k and calculate how much you'll have to earn to reach that goal.....

While you're at it, why don't you look into why my 5k order to cover Citi at $3.27 has seen 50 million + shares trade at "exactly" that amount for the last 3 hours without execution and then suddenly, when it falls to $3.26, it "instantly" hits.

Do you think maybe TD Ameritrade has an order execution system that only executes a trade of arbitrage?

I trade constantly and accept this as pert of the environment. In a way their greed protects me. Maybe this is true of the after hour markets as well.

Wed, 12/23/2009 - 15:32 | 172890 Anonymous
Anonymous's picture

Ain't life grand?

Wed, 12/23/2009 - 15:34 | 172893 Anonymous
Anonymous's picture

As good an explanation as any for being dead wrong for the better part of a 9 month rampage.

Better luck next year zh

Wed, 12/23/2009 - 15:34 | 172894 Anonymous
Anonymous's picture

Oh.....and Bernankefraud...these guys are gonna blow it
though since none of them have a whit of business experience. Smoke and mirrors didn't save the Harvard
swaps, did it?

Wed, 12/23/2009 - 15:39 | 172895 phaesed
phaesed's picture


Executive Order 12631--Working Group on Financial Markets

Source: The provisions of Executive Order 12631 of Mar. 18, 1988, appear at 53 FR 9421, 3 CFR, 1988 Comp., p. 559, unless otherwise noted.

By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:

Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:
(1) the Secretary of the Treasury, or his designee;
(2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee;
(3) the Chairman of the Securities and Exchange Commission, or his designee; and
(4) the Chairman of the Commodity Futures Trading Commission, or her designee.
(b) The Secretary of the Treasury, or his designee, shall be the Chairman of the Working Group.
Sec. 2. Purposes and Functions. (a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:
(1) the major issues raised by the numerous studies on the events in the financial markets surrounding October 19, 1987, and any of those recommendations that have the potential to achieve the goals noted above; and
(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.
(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.
(c) The Working Group shall report to the President initially within 60 days (and periodically thereafter) on its progress and, if appropriate, its views on any recommended legislative changes.

Sec. 3. Administration. (a) The heads of Executive departments, agencies, and independent instrumentalities shall, to the extent permitted by law, provide the Working Group such information as it may require for the purpose of carrying out this Order.
(b) Members of the Working Group shall serve without additional compensation for their work on the Working Group.
(c) To the extent permitted by law and subject to the availability of funds therefore, the Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions.


This has been mentioned several times on ZH -

But it's so funny that people still deny it.

Wed, 12/23/2009 - 16:04 | 172934 Zippyin Annapolis
Zippyin Annapolis's picture

The Working Group on Financial Markets (also, President's Working Group on Financial Markets, the Working Group, and colloquially the Plunge Protection Team) was created by Executive Order 12631, signed on March 18, 1988 by United States President Ronald Reagan.

The Group was established explicitly in response to events in the financial markets surrounding October 19, 1987 ("Black Monday") to give recommendations for legislative and private sector solutions for "enhancing the integrity, efficiency, orderliness, and competitiveness of [United States] financial markets and maintaining investor confidence"

Uh--and Now the unwritten part--they presided over the next 5 meltdowns--the "mortgage" derivatives meltdown, LTCM, Mexican debt crisis, tech bubble, subprime/ CDO/ CLO barf up.

They also presided over and helped draft/ pass the flawed Commodity Exchange Act (CEA) and suceeded as a result in creating the derivatives market run amok.

Created of, by and for the Large Banks: left alone they could not find their arse with both hands.


So manipulating the market would be a task well beyond their capability. If they even tried it would crash-- incompetence cubed.



Wed, 12/23/2009 - 15:37 | 172899 AnonymousMonetarist
AnonymousMonetarist's picture

November 10, 2009
The Pragmatic Capitalist

I don’t know if any characteristic of this massive 6 month rally has been more apparent than the huge futures run-ups we’ve seen at random points during the trading day. Without news, the S&P 500 futures get gunned on huge volume and surge higher. I’ve seen it at least every other day for 6 months. It tends to occur on low volume days such as the one we’re currently experiencing, the futures are getting gunned on massive volume without any coinciding volume in SPY. 

This means an institution is jamming the futures higher knowing that they can drive the market higher on no volume. Effectively, they can take out every asking price with a large enough order and immediately create a 0.25% bump in the market in no time. 

If you’ve been wondering why we’ve seen huge surges on low volume days and conviction high volume selling on down days this explains much of it. I don’t know if there is malfeasance behind this or if the buyer is simply too stupid to input trades at the bid (like most rational investors do as they try to achieve the best low price), but this is certainly an odd phenomenon that I cannot recall occurring so routinely over the course of my career.

Who is the mystery institutional buyer that just needs to place their huge block orders with such urgency?

August 18, 2009
Phillip Davis
Seeking Alpha

Anyway, so the after-hours markets were flat but the ubiquitous futures market took off as soon as all the retail traders had their trading accounts turned off for the night. You would have thought something huge was happening to watch the relentless, nonstop, 3-hour climb in the Dow, the Nasdaq, the S&P and even the Russell futures that led into the Asian open. Did this blatant manipulation of the indexes fool Asian investors? Of course it did! The Nikkei opened at 8pm EST and had gapped down to 10,200, exactly 4% off the high of 10,620 on Friday. As I said to members in yesterday’s chat, that 4% line is critical in the follow-through day on the 5% rule as it represents our expected bounce off 5%, so holding that line is still bullish.

Well, never let it be said that Mr. Stick doesn’t know how to paint a bullish picture. The Nikkei was rescued from failing that 4% line by the relentless futures buying between 8pm and 10:30, which coincided with 9am to 11:30 on the Nikkei, which just so happens to be when they close for lunch. What happened at 11:30 Tokyo time? Well, suddenly everyone lost interest in the US futures and they fell ALL THE WAY BACK to where they started, in just 60 minutes. Please, Congress, whatever you do, don’t look into this nonsense - better to just sit there in your little offices and say "the market forces are too complicated for me to understand" and let 12 people control the world, that’s what America’s all about, right?

So, where was I? Oh yes, manipulative BS! Of course, coming back from lunch and seeing that the US futures had nose-dived sent the Nikkei right back to 10,200, but there was another way to prop up the Nikkei and that would be a dollar rally against the Yen. The dollar had already been jacked up from 94.37 Yen at the Nikkei’s open to 94.75 at lunch but, at 12:31, the minute the Nikkei reopened, the Dollar began flying up all the way to 95.30, which rallied exporters and lifted the Nikkei 100 points into the close. After the Nikkei closed, the Dollar fell back to 94.9 Yen - mission accomplished, time to rest.

Wed, 12/23/2009 - 15:42 | 172905 Anonymous
Anonymous's picture

Just make sure when this thing blows up, you don't step in
to buy before S&P 500:) These guys have nailed the
USA to a cross with all these shenanigans.

Wed, 12/23/2009 - 15:45 | 172911 Anonymous
Anonymous's picture

The Pragmatic Capitalist seems to have come to a different conclusion with regard to intraday, A/H trading. Your thoughts?

Wed, 12/23/2009 - 15:48 | 172916 Anonymous
Anonymous's picture

Could it be that, in these times, the source of conflicts, fears and news that moves the global markets is somewhere in Asia or Europe. And the more important ¿surprises?, like a default in Dubai or Greece sunking in the Mediterranean occur when Americans are sleeping.

Wed, 12/23/2009 - 15:50 | 172920 Barry
Barry's picture


As I sit here in my office in an attempt to liberate myself from boredom, reading Zerohedge, I can not quite figure out what this guy is talking about. See post:


I think the VIX is seriously mispricing risk at these levels and would add that big moves down always seem to come on the heels of low volatility. Any thoughts?

Wed, 12/23/2009 - 15:59 | 172931 Anonymous
Anonymous's picture

You are correct. The VIX is just another
false flag held up for the sheeple. When all
is calm (in the teens) stay out of the

Wed, 12/23/2009 - 16:37 | 172981 El Hosel
El Hosel's picture

The saying goes, when the VIX is high its time to buy, VIX is low its time to go.

At the top of the market a couple years ago Goldman and some other Bankers had an investment conference, one of the topics was the "elimination of risk".  At that time ( DOW 14,000 ) there was little risk in the market, apparently. Henry Paulson made his "strongest world economy" he had ever seen quote a few weeks earlier.

Wed, 12/23/2009 - 16:39 | 172987 El Hosel
El Hosel's picture

July 12th, 2007 – Paulson: "This is far and away the strongest global economy I've seen in my business lifetime."

Wed, 12/23/2009 - 15:58 | 172929 buzzsaw99
buzzsaw99's picture

teh usa equity markets are just a tool of teh fed. reflate desired = up, price inflation control desired = down. Why anyone tries to trade on fundamentals is beyond me.

Wed, 12/23/2009 - 23:23 | 173408 loki
loki's picture

so true.  I unfortunately learnt the hard way :(

Wed, 12/23/2009 - 16:01 | 172933 Anonymous
Anonymous's picture

Finally... Fuckin' A. I've been waiting for someone to address this. Absolutely IDIOTIC. This market is so unbelievably, undeniably, and undoubtedly manipulated, all I'm waiting on is for the exact location it's happening from to be uncovered.

This is all that's left in popping this Obamabubble.

Wed, 12/23/2009 - 16:02 | 172935 Anonymous
Anonymous's picture


Yesterday, President Obama claimed, "I didn't campaign on the public option." Seriously? Reporters quickly proved otherwise.
Now we have a rapid-response TV ad showing that Obama not only promised a public option, but said that mandates requiring people to buy private insurance are bad policy. (The Senate health care bill does the exact opposite of what he promised.)
Can you help make sure Congress knows the truth as they negotiate a final bill? Click here to see the ad and chip in $4 to help put it on TV in DC.

Wed, 12/23/2009 - 16:03 | 172937 Anonymous
Anonymous's picture

Banks to pay taxman billions

Four big banks have admitted defeat in a long-running battle with the tax department and admitted liability for more than $2.2 billion in unpaid tax.

Westpac, the ASB Bank, BNZ and ANZ-National last night agreed to settle cases with Inland Revenue and repay an amount believed to be just over $2 billion.

The agreement is believed to be New Zealand's largest commercial settlement.

Wed, 12/23/2009 - 16:10 | 172946 Anonymous
Anonymous's picture

Wall Street has a slick line of bullshit for every
occasion. For example, when the bond market is tanking,
they like to say this pre-sages a strong recovery. Let's see how this works out, fellas.

Wed, 12/23/2009 - 16:11 | 172949 Lux Fiat
Lux Fiat's picture

Continued gunning of indices in light after hours volume, while during market hours indices make little to no progress, especially when they decline from the initial opening pop (put perhaps end up on the day) = "smart money" distribution.

Thu, 12/24/2009 - 19:04 | 173950 ATG
ATG's picture


Wed, 12/23/2009 - 16:18 | 172959 east paris trader
east paris trader's picture

To argue that the markets are free, one would also have to accept that the most skilled traders in the world have suddenly lost their touch.   The volume of futures contracts purchased on any of these market drives is fairly modest.   The traders behind these moves could have acquired this volume while lowering the market had they chosen.  The went up for one reason -- they wanted it too.


Anyone notice how a.m. morning drive has been losing its steam?   We get the big run up on light volume in AH, then a smaller morning drive after the bear dip.  Then what happens?   Churn.

Maybe its just the old dog trainer in me, but it looks like the crowd is being trained to buy at the top.   Goldman is distributing in heavier daily volume at very good prices.  When they have their position --- look out below!





Wed, 12/23/2009 - 16:22 | 172963 Anonymous
Anonymous's picture

They're taking their sweet time about it
since no one will buy this crap. The
word is out.

Wed, 12/23/2009 - 23:43 | 173425 buzzsaw99
buzzsaw99's picture


Wed, 12/23/2009 - 16:31 | 172977 Woodshedder
Woodshedder's picture

With all due respect, you all are approaching this from the wrong perspective. What you should be looking for is when this happened before.

The overnight edge was very strong from the bottom in 2003 to the top in 2007.

Separating the daytime edge shows that it has been flat from 2003 to the present.

What's the point? The point is that what has been going on since March and September with the overnight markets is in no way a new phenomenom. It has been going on for a long long time. While I enjoyed this analysis, it is pretty much meaningless without consideration of the long-term perspective.

Wed, 12/23/2009 - 17:54 | 173090 Assetman
Assetman's picture

I think what you are saying about the overnight edge in the 2003-07 time period is intriguing.  Do you have the evidence to back it up?

The two things I remember about 2003 that were differentiated from today were that:

(1) There was a concerted effort among insiders to load up on stock options and anything resembling the underlying common stock, as the confidence of getting an outsized mulit-year return was high;

(2) Despite what may have happened in the after-hours in 2003, therewas a real surge in mutual fund and retail buying that supported the strong daily volumes.   Today, a huge portion of the volume flow consists of HFT activities, and domestic equity mutual fund flows are actually down.

So while this may not be a new phenomenon by any stretch, the characterictics of this rally is vastly different from 2003.

Wed, 12/23/2009 - 23:51 | 173435 Woodshedder
Woodshedder's picture

Assetman, I could post similar graphs to what is posted in this article, except I do not know how to do that in the comments section. Perhaps is Marla or Tyler read this, they allow me this privilege.

This is of course very easy to test using excel and yahoo data. I only wish we knew exactly which security has been used to make the graphs in this article. I just used SPY.

Thu, 12/24/2009 - 00:27 | 173464 Assetman
Assetman's picture

Thanks, Woodshedder... I would gather that SPY would be a sufficient proxy, given its ubiquity.  The only workaround I can think of is to post a jpg of you file to Photobucket and provide a link.  No problem if you can't.

And to be quite honest, I've made my points as a reference to my own investment experiences.  I wouldn't even know whether I could get good insider data from 7 years ago.

What I can tell you is that I made a boatload for my PM in those days picking up overloaded options in Industrial companies.  Ah, good times...

Wed, 12/23/2009 - 16:46 | 172998 Reductio ad Absurdum
Reductio ad Absurdum's picture

TD, very good post. Too bad it got threadjacked by that buffoon promoting yet another fool politician. (Hint: pluralistic democracy has failed.)

You've made a good observation that the market's rise is occurring mostly after hours on small volume. But you haven't drawn much of a conclusion.

One would like to think that IF the market is going up in a fake way, through low volume manipulation, then it is due for a massive correction to return to a level that matches the underlying fundamentals. HOWEVER, there is no reason to think such a correction will occur any time soon. The market could go up steadily for years before having another 2008-style crash to return to fundamentals.

In short, it doesn't matter how the market goes up as long as it goes up, because it's all an illusion anyway. If it goes up overnight and traders don't send it back down during the day, then they have accepted the new levels. Would you have any more faith in this market if it had risen during the day rather than after hours? Would the fundamentals be any stronger?

From my point of view the entire US market has been in a bubble since the beginning of 1995, but that hasn't stopped it from a 15-year run up despite ever-worsening fundamentals over that time.

Wed, 12/23/2009 - 17:01 | 173012 Sancho Ponzi
Sancho Ponzi's picture

Thanks for the positive feedback, Reductio. Unlike you, I will never give up on this country, and if that makes me a buffoon, what does quitting make you?

Wed, 12/23/2009 - 18:02 | 173095 B9K9
B9K9's picture

Please, stop with the pathetic trolling. I would imagine very few readers of ZH fall into the category of day-time soap opera viewer that appears to be your target demographic.

Don't be a quitter? That's the appeal of the carny-cum-TV evangelist. You see this mentality every day in a cancer ward - the brave, gutsy patient putting up the good fight. The sad reality (which no doctor will tell you) is that either the chemo works or it doesn't. It's got nuthin' to do with will power.

Likewise, either we as a society achieve some miraculous ability to service the next tranche of credit financing necessary to blow another asset bubble, or we don't. If we do, the system continues as it has. If we don't, we're going to experience a complete systemic failure, one which by necessity will forgo such niceties as "elections".

We (or our ancestors) made our beds betting on a ponzi economy; thus we (and our republic) will either live or die by its successful continuance or lack thereof.

Wed, 12/23/2009 - 21:30 | 173308 Sancho Ponzi
Sancho Ponzi's picture

You dismiss and ridicule, and yet you provide no answers or solutions. Those with money and power will always try to increase their influence and protect their interests. Does that mean we as citizens should offer no resistance? If Glass Steagall had not been repealed, would our current economic situation be as dire? If every derivative in the world blows up tomorrow, what type of leader would you want in place to lead us out of the rubble? 

Human nature is neither constant nor universal. If you are a fatalist and wish to believe human nature dooms us all to failure and collapse, that is your choice. You liken the current economic condition to cancer, but many cancers can be prevented or avoided by making intelligent decisions. Eventually we all die, just as all nations and empires will fall. Many people commit suicide because they are consumed with the fear of death. Does that mean we should all commit suicide and be done with it? Should we hand our country over to big finance to hasten its collapse? 



Wed, 12/23/2009 - 17:11 | 173032 Woodshedder
Woodshedder's picture

Market went up in overnight hours from 2003 to top in 2007. This time around it certainly does not mean that a crash is imminent, any more than in did from 03-07.

Wed, 12/23/2009 - 17:30 | 173064 B9K9
B9K9's picture

the entire US market has been in a bubble since the beginning of 1995

Exactly. And how was this accomplished? Market prices can only continue to rise as long as additional layers of debt pyramiding can be serviced. It isn't a coincidence that this period corresponded with off-shoring production to new, lower cost regions. The gains in net margins enabled yet another 'floor up' to be constructed.

Timmy is absolutely correct - he is telling everyone/anyone willing to listen that our economic system is based on nothing more than credit driven asset inflation. For those who don't understand, or want to argue this fact, they are reduced to wasting their time wondering/debating the state of the market while completely missing the larger picture.

Here's all anyone needs to know: unless we come up with some incredible technological breakthrough in energy optimization and/or economic efficiency, there is simply NO WAY we will have sufficient output to service the next layer of debt scaffolding necessary for continued economic growth.

End. Of. Story.

Oh, and has to the state of the republic, democracies always fail. That's another prediction you can bank on.

Wed, 12/23/2009 - 16:47 | 173001 Cursive
Cursive's picture



Wed, 12/23/2009 - 16:51 | 173004 Apocalypse Now
Apocalypse Now's picture

Meanwhile in the real economy, the eviction business is booming!

This is an incredible video called Lost Vegas:

Wed, 12/23/2009 - 17:17 | 173044 Gubbmint Cheese
Gubbmint Cheese's picture

saw this a while ago a great piece: Notice the reporter here is the same one who was detained in North Korea months later.

Wed, 12/23/2009 - 16:53 | 173005 Athena
Athena's picture

There are no consistently good politicians - vote early, often, and against.

Texas Governor Rick Perry's handywork includes a state toll system contracted to Spain. Perry turned existing road projects into toll roads. Perry's cohorts are now hired as lobbyists for foreign contractors. There is a revolving door for his team and the lobbyists working for Spain. Perry has spent an inordinate amount of time on vacation in Spain at the taxpayers expense - certainly not staying at the Holiday Inn.

Perry's slick ways include the following: Without advance public notice, and announced late on the last day for legislative bills to be filed without the Governor's approval, TxDOT Officials joined by Governor Perry and Federal Highway Administrator Mary Peters signed a 342-page agreement with Cintra Concesiones de Infraestructuras de Transporte SA (Madrid, Spain) to finance and build the TTC-35 Trans Texas Corridor generally parallel to IH-35 from the Valley to the Red River.

I do not drive on the toll roads that Rick Perry paid Spaniards to build with Texas taxpayer's money.

Vote NO for Rick Perry.

Wed, 12/23/2009 - 18:52 | 173160 Anonymous
Anonymous's picture

No doubt Perry has his faults and you list them accurately. However, no way in heck we can let Hutchinson win as she is Washington's pick to come in and move Texas left into the mushy RINO tent. Medina is solid, but she will only ensure Hutchinson gaining the nomination.

Despite his faults, Gov. Perry is the only prominent politician to publicly state the magic word that drives the inside the Washington Beltway elite crazy - SECEDE.

Perry is pro-life and pro-guns. Couple that with the secessionist talk and he has my vote.

Texas to secede in 2012. Anyone who still values freedom should get down here while there's still time.

Wed, 12/23/2009 - 23:03 | 173385 Athena
Athena's picture

Secession has never been a Texas right although splitting into five states might be, subject to US congressional approval. Secession was decided by the Civil War. Secessionary, narcissistic, falderal are red herrings, like rants on flag burning. If everyone screams about burning flags, who can hear Benny and the Choppers axing the dollar?

Corporations and Wall Street use money to buy politicians and mutually line their pockets with taxpayer's money. With voter participation at 10%, whomever is elected will follow corporate funding, wherever it leads. Playing the odds that the longer they are in office, the better thieves they become, I think the best bet is always to vote against the incumbent. Politicians should serve and get out.

Also, not trying to be too abrasive, I think that "pro-life and pro-guns" sounds like an oxymoron.

Wed, 12/23/2009 - 20:15 | 173229 Unscarred
Unscarred's picture

I do not drive on the toll roads that Rick Perry paid Spaniards to build with Texas taxpayer's money.

This is in no way an endorsement of Rick Perry whatsoever, and please don't take this the wrong way, as this is simply an additional perspective to outsourcing contruction with taxpayer dollars:

A well-known and long tenured mayor here in tropical Northeast Ohio (we'll call him "Donald L. Plusquellic"), has tendered every significant road, utility and sewer project to one of his local cronies (lets call them, say, Kenmore Construction) to the point where many companies no longer make the effort to submit bids on most jobs, because hell is more likely to freeze over than someone else win the job.

A contractor I know (ficticiously named Julius Schmeltzer) went so far as to submit several bids below cost just to see what would happen (and, of course, his bids were still rejected).

I completely understand that there is a lot to be said for spending local tax dollars with local companies; but there is also something else to be said for corruption, competition, and responsible budgeting with respect to public projects and spending taxpayers' dollars, as well.  It could very well be that Perry is accepting kickbacks from the Spanish Mafia, who knows...  But from my perch, given the long standing corruption in the Rubber City, I find it refeshing to see politicians who don't gravy train off their largest benefactors.

But I completely understand and appreciate your perspective, as well.

Wed, 12/23/2009 - 16:53 | 173006 Anonymous
Anonymous's picture

Greatest country in the world. It's all a buy at any
price every day. Don't forget to support the troops
and Obamacare.

Wed, 12/23/2009 - 19:45 | 173208 Anonymous
Anonymous's picture

Past tense. See how quickly corruption brings downfall.

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