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"Wax On": Intraday Decoupling Accelerates As Computers Are Once Again On Their Own
Even as the EURJPY suggests that the intraday market peak should have occurred about the time the ES was unable to breach the 200DMA for the first time earlier today, stocks are now semi-sentient, and realize that with OpEx coming up in a few days, at this point no correlations matter: the market must be gunned beyond max pain. Will stocks, as always has been the case, eventually follow FX back lower, or have we reached that critical day when even the FX traders give up, and go to watch sport, leaving their own algos at the mercy of Hal9000. At least based on empitical evidence, the spread will close. One thing is certain: the market continues to make no sense, with this straight up ramp on a day chock full of "good news."
And an indexed look at the divergence:
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Love those "wax on" days...brings me back to the good old years!
That just got wiped out in the last crisis. Hope your ready for another 50% cut from your "good old years".
P.S. We are still a long ways from April's high, so you better hope Big Ben's arm does not get tired.
You're just another gambler who's bragging about your skill on how you hit 21 7 straight times in a row. However - we won't hear from you when you bust out eventually...
Where is Miss Stock Pumper?
A "Polish Job" sounds interesting. Is that a blow job given by the Polish woman holding the sign?
And the score from the Zimbabwean judge: It's a 9.9!
When asked after the event why the HAL9000 team did not receive a perfect mark on such a flawless performance, the judge from ZBW replied "I thought they should have put more effort into the opening leap, it could have added so much more to the spectacle".
When we have an up day it's the computers, when we're down it's fully rational humans realizing the dire depression we're in? Interesting concept.
Well once we give computers the power of cognitive awareness, be prepared for plenty of computers killing themselves.
Well, it certainly isn't long term investors looking for solid, sustainable dividend yields.
When we have a down day, we have volume.
When we have an up day, we have none.
Draw your own conclusions godfader.
^this ∞ +1
Well, if there's "no one left" in the markets except the big playas, and they have liquidity, then it kinda makes sense that there will be light volume upsides. It also makes sense that these same "playas" will sell quickly when they sense a loss, which explains heavier volume downsides.
So Leo's just betting -- with some rationality -- that the "big playas" will keep the game going.
Until they get tired of it, of course, or decide to have a "correction" for their own purposes.
As they trade the algos still need someone on the other side of the trade, and that is where the shorts' stops are being zapped. If they were trading with just themselves, and there were no more stops to grab, the market would head down.
There is no such thing as a hidden stop. Its all part of the big fix by makers and algos. They let no stop go untaken.
From Sal & Joe at Themis Trading comes this terrific timeline regarding the events surrounding high Frequency Trading. (Courtesy of The Big Picture)
Check out the fantastic graph:
http://www.themistrading.com/article_files/0000/0522/HFT_Timeline_Perspe...
An editor's journey into the world of high-speed trading and proprietary algorithms that make or break markets.Inside the Machine: A Journey into the World of High-Frequency Trading
The 25 companies listed here were the favorites of high frequency traders in the U.S. during the past two years.Top 25 Most-Favored Stocks In High Frequency Trading
I never realized disappointing sales at Best Buy was so bullish. They should disappoint some more.
Don't forget the drop in Homebuilders Confidence Index, an Empire Index that missed estimates, along with Freddie-Fannie easily having the ability to break the US Treasury (http://www.bloomberg.com/apps/news?pid=20601109&sid=an_hcY9YaJas&pos=15). Hell if all the indicators tomorrow are down, I think we will see /ES at 1700.
The fact that Best Buys #1 competitor went bankrupt leaving BB as the primary tech outlet...and that's all they could do w/ in effect half the previous tech doors closed due to bankruptcy. Bull(shit)ish.
ouch.. facts hurt..
carry trade, carry trade, carry trade..........
The same forces are moving the market both ways, thus making a market. Bears vs.Bulls is a folkloric concept, much like Republicans vs. Democrats.
I agree, but I think more people jump on the bandwagon when they are selling provided they don't get faked out too many times like today.
Tyler - how do you index these?
It's been fine looking at them on the 5 or 10min chart and ,matching up peaks/troughs but an index value would look better probably.
I saw some conflicting comments last time this divergence was brought up and it wasn't adequately answered for my taste. I am trying to understand this more. It doesn't bother me that one side of the trade is leveraged more than the other, but I think the leveraging should be consistent from chart to chart for the correlation to be considered valid.
Just the two charts above have different scaling on the ESU0 side. I followed 112 and 113 across the charts and estimated what the ESU0 value was for EURJPY 112 and 113 and found:
Chart #1: 112 maps to 1093, 113 maps to 1108. Thats 1:15 ratio
Chart #2 : 112 maps to 1093, 113 maps to 1102?. Thats 1:9 ratio
Why are the ratios not the same between the charts? It seems that almost any correlation can be shown if scales are arbitrary...
Maybe I will go back and look at the older charts to see if I can figure out what I am missing. Any help would be appreciated.
You appear to be correct. Something is out of whack on the scaling.
No problem, as of 1Q2010 combined federal and state spending (borrowing) constitutes 39% of GDP. Soon we won't have to worry about the private sector anymore. There won't be one.
Forget this risky investing shit, get a government job and steal all you want, risk-free.
Wow blatant pumping in the ES, low volume then out of nowhere bam 12:15 20k 12:19 CT 17k buying. Had the shorts scared after that one. I think they are manipulating it both ways IMO.
Afterhours is shaping up to be a show.
Is that some massive selling going on in SPY at the last minute and in afterhours?
dis-tro-bu-shon
ES is down about a handle but no i dont see any massive selling. The low prints (we mention these almost every day on the eod threads) are simply trades that weren't executed before hand at that price. Theres no liquidity at that price, the price just goes there for a millisecond to validate the trade.
it's said that that's the sign of a bottom: market goes up in defiance of bad news...:)
It'll have plenty of shit to obstinate for next 2 weeks.
From a standpoint of accumulation/distribution, it makes sense.
Outside money will be more tentative about buying in the face of bad news. This creates a good opportunity for the big money exchange insiders to move prices from wholesale to retail without getting picked off.
Of course, it's no sure thing.
remember O.E.W.
option... ;)
Yep. I wouldnt be surprised to see the 1100 level get very sticky.
Or, of course, 1200 by the end of the day.
When external, irresistable factors rear their heads, the market goes down. Once those finish their cycle, the cyborgs return to their regularly scheduled program.
Market is ill. Doctor prescribes, drug store supplies, who's gonna help him to kick it? Run, Forrest, run.