So what does Ben Bernanke do? According to these two perfectly spot-on Australians, "he makes statements... very, very, very, very, very, very, very, very, very, very, very, very, very, very careful ones..." And when he does there are safety procedures, "get under your desk, in a doorway... somewhere safe." But, they go on, "What would happen if companies improve on their own? Well that would be an even bigger disaster... because Ben might turn off the easing tap." It's funny, coz it's sadly true...
- NASDAQ SAYS WILL WORK WITH OTHER EXCHANGES ON `GLITCH'
- NASDAQ STATEMENT SAYS 'TECHNICAL ISSUES RESOLVED'
- NASDAQ SAYS TECHNICAL ISSUES WERE RESOLVED IN FIRST 3O MINUTES
- NASDAQ SAYS IT COORDINATED WITH OTHER EXCHANGES FOR REOPENING
- NASDAQ SAYS THAT PRICE QUOTES WEREN'T BEING DISSEMINATED BY SIP
- NASDAQ SAYS BALANCE OF TRADING WAS DAY WAS FINISHED IN NORMAL COURSE
- NASDAQ SAYS IT SUPPORTS ANY STEPS NEEDED TO ENHANCE PLATFORM
Well, that was fast.
Wondering why the ES is soaring? Because the NYSE just broke too.
- NASDAQ HAS DECLARED SELF HELP AGAINST NYSE ARCA (ARCA)
- NASDAQ DECLARES SELF HELP AGAINST NYSE ARCA AS/OF 15:26:42 E.T
- NYSE ARCA HAVING DIFFICULTY PROCESSING OUTBOUND TAPE C QUOTES
And BATS too:
- BATS HAS DECLARED SELF-HELP AGAINST ANOTHER MARKET CENTER
- BATS SAYS ROUTING TO NYSE ARCA HAS BEEN SUSPENDED AS OF 15:39
An absolute circus meant only to preserve confidence in a rigged, manipulated system based on incorrect electronic trades.
The Nasdaq was so desperate to rush and "fix" itself, somehow in the process it forgot all about the NBBO and that the bid has to be below the ask.
Spoke to Tim. Planning dinner in September. Tim believes in buyback and is doing one. What will be discussed is magnitude.
— Carl Icahn (@Carl_C_Icahn) August 22, 2013
NASDAQ intends to re-open trading in all Tape C securities with a 15-minute quote only period. All stale quotes have been cleared from the UTP SIP at this time and halts have been disseminated with a reason code of T6. NASDAQ will first re-open trading in symbols ZVZZT and AAIT with a 15-minute quoting period beginning at 14:30, with trading beginning at approximately 14:45. All other securities will then be released at 14:55 with a 15-minute quote only period with trading resuming at approximately 15:10. NASDAQ will not be cancelling open orders on the book prior to a re-open. Customers who wish to cancel their orders may do so and any customer who wishes to not participate in the re-opening should cancel their orders prior to the resumption of trading.
While we somewhat ironically tweeted of the possibility that AAPL breaking back below the mythical $500 level was indeed responsible for the NASDAQ breaking...
Ok, who sold AAPL and broke the NASDAQ?
— zerohedge (@zerohedge) August 22, 2013
Well a glance at the following charts shows from Nanex that may well have been the case as the chaos in the market during that time was extreme to say the least...
With US equity market trading basically halted, the world has turned to Chicago and is 'hedging' stocks. Bonds are also being sold with 5Y having just hit 1.70%.
First it was BATS self-helping against NYSE Arca, now it's Nasdaq's turn to break. Joking aside, AAPL dipped below $500 literally minutes before the NASDAQ broke. We joked earlier when we said any selling is enough to break the market. Now, we are not so sure...
Equity, bond, and FX markets appeared to go into hibernation once Europe closed as ranges (and volume) were very low for most of the day. Stocks opened modestly green, snapped lower (on what seems to be an avalanche of 'erroneous' options trades from Goldman which were later DK'ed) then lifted (most notably the Dow - which dipped below 15,000) up to yesterday's highs until Europe closed. Sectors moved in a highly correlated manner along the same path but once 1130ET hit, the S&P 500 traded in 3-4pt range for the rest of the day. Treasuries were similar though they rallied notably during the European day session (as EU sold off) then flat-lined in 1bps range for the rest of the day. Of course, all that changed in the final minutes of the day as all the major indices came under pressure (with Trannies and Nasdaq leading), VIX reversed higher, and the Dow closed red!
This morning's debacle in the options pit appears - just as we noted - to be due to Goldman Sachs 'erroneous' trades:
- *GOLDMAN MAY LOSE AS MUCH AS $100M ON ERRONEOUS TRADES: FT
But, as we also noted earlier, unlike Knight (which was wiped out when its market-making algos went rogue), in Goldman's case:
- *GOLDMAN SAYS 'WORKING WITH EXCHANGES' TO RESOLVE OPTIONS ISSUE
They get everything DK'ed...
Treasury bond yields have risen for 5 of the last 6 days (with the 7Y yield up 35bps in that period) adding 5bps today but since the latest cluster of Hindenburg Omens began to appear, the S&P 500 has fallen for 9 or the last 11 days (-3.6% from the 08/02 highs) and closed below its 50DMA today (on light volume). Today saw 430 new lows (the second highest since Oct 2011) and only 15 new highs. The S&P joined the Dow and the Trannies in the red for the period post-FOMC (June); and only Healthcare, Discretionary, and Industrials remain green from that 6/19 event. The USD ended the day practically unchanged but FX markets were very volatile (AUD and JPY all over the place in the majors and INR in the locals). Commodities in general slid lower by around 0.7% or so in a relativley highly correlated way with stocks. Credit markets continue to underperform, leading stocks lower. VIX was banged back above 15% to its highest close in 7 weeks. Today was the 4th negative close in a row for the S&P - the first time this year.
The cluster of Hindenburgs is indicating a very worried market (for example 99 New Highs and 231 New Lows) and for a change a Fed speaker was unable to provide the headline-reading BTFD ammo to save us from the drop in stocks. The 6th down day in the last 8 in stocks and red on the month-to-date screens is not something we are used to seeing. The USD was flat to slightly lower on the day (even as AUD surged and JPY leaked higher) as were Treasury yields (which took a pause after 2 days of being smashed higher). While bonds were flatish, homebuilders and utilities stocks were jammed lower once again (as AAPL pulled Tech and the Nasdaq to outperform again). Copper and oil were also flat on the day but gold saw some improvement (over $1330) and Silver surged 2% (up over 6% on the week now - biggest week since Oct 2011). Yesterday's near-record steepness in VIX's term structure that we warned about seems to have been followed by the usual short-end rip as VIX broke back above 13%.