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Proof Gold's Latest Slam Was Not A "Fat Goldfinger"

Tyler Durden's picture




 

With December's "fat finger" in US Treasury Futures proved as nothing but an HFT algo gone wild, Nanex has turned its deep-thought to the recent halt in gold futures markets. Their conclusion, this was not the result of a fat finger, but rather the work of a high frequency trading algorithm that would pause, and (probably) test the market before continuing. A fat finger would not have had such distinguishing features.

 

December's bond melt-up was not a fat finger but an HFT algo gone wild..

Video replay of trading action in T-Bond Futures casts doubt that this was a "fat-finger" event
A fat-finger trade would send prices straight up, but video replay clearly shows pauses and ample back-and-forth trading.

 

And so was the recent gold smack down...

Via Nanex,

On January 6, 2014 at 10:14:13, Gold futures plummeted $30 on heavy volume. About 4,200 contracts send gold futures prices tumbling $30 and trigger a 10 second trading halt.

Update - 8-Jan-2014

The chart below shows the entire $30 drop in the price of Gold futures that occurred in just under 100 milliseconds (1/10th of a second). When we separated groups of trades by a jump in the exchange sequence number (a technique to determine the size of a larger order) we discovered there were 9 groups where the sum of the trade sizes was exactly 338 contracts! Each group is composed of widely different number of trades (211, 186, 120, 193, 97, 193, 137, 112 and 109 to be precise), yet the sum of the sizes of each group totals exactly 338. We show these 9 groups in the chart below. What's more, there are other trades occurring between these groups of 338 contracts.

What this tells us is that this was not the result of a fat finger, but rather the work of a high frequency trading algorithm that would pause, and (probably) test the market before continuing. A fat finger would not have had such distinguishing features.
 



The next chart shows the cumulative sum of trade sizes for each group of trades where a group is distinguished by a jump in the exchange sequence number. Since exchanges use one sequence number for multiple products, you can usually tell if a group of trades is the result of a larger order by the lack of gaps in the sequence number. That means no other contracts traded during that time.

The time axis is the millisecond time component of the second 10:14:12, so that the value 889 corresponds to 10:14:12.889. The value axis is the cumulative number of contracts. The red diamond indicates the total size of a group when a sequence jump is detected.

Notice there are 9 groups that total exactly 338 contracts. Also note that each of these groups are separated by smaller groups of trades, and 3 of these smaller groups total 61 or 62.



1. February 2014 Gold (GC) Futures



2. February 2014 Gold (GC) Futures



3. February 2014 Gold (GC) Futures



5. March 2014 Silver (SI) Futures



6. SLV ETF trades



7. GLD ETF trades




Compare the next 4 charts which all zoom in on the first 1/10th of a second of activity (10:14:12.880 to 10:14:13) in Gold and Silver ETFs and futures. The futures trade in Chicago, while the ETFs trade in NY. It takes information about 4 to 5 milliseconds to travel between these two locations.

8. February 2014 Gold (GC) Futures - Zooming in on about 1/10th of a second.



9. GLD ETF trades - Zooming in on about 1/10th of a second.
Compare to Chart 8 above - note how the futures activity starts about 5 milliseconds earlier, indicating the move started in Chicago (futures) and not in NY (GLD).



10. March 2014 Silver (SI) Futures - Zooming in on about 1/10th of a second.
Trading didn't start in silver futures until a good 30 milliseconds after gold, which indicates silver was reacting and not part of the same strategy affecting gold.



11. SLV ETF trades - Zooming in on about 1/10th of a second.
Activity in SLV appears 5 milliseconds after activity in GLD. The silver ETF reacts faster to the the gold ETF (both in NY), than the silver futures reacts to gold futures in Chicago.



12. GLD ETF trades - Zooming in on about 1/2 second of time.
Note how trades from EDGX (blue diamonds), Dark Pools (squares) and BOST (light green circles) are reported significantly late.



13. GLD ETF - Direct Edge-X trades and NBBO
It's easier to notice the significant delay in trades reported from Direct Edge-X


 

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Wed, 01/08/2014 - 16:53 | 4312799 Dr Benway
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It's a funny type of seller that wants as low a price as possible.

Wed, 01/08/2014 - 16:57 | 4312810 Pladizow
Pladizow's picture

CFTC will respond 3 years later with - Iainseenuffin!

Wed, 01/08/2014 - 17:36 | 4312946 Occident Mortal
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When I sell, I try and do it with MINIMUM price impact.

 

 

I should say all good HFT works on the same 4 stroke cycle;

 

1). Buy X with minimum price impact

2). Buy X with maximum price impact

3). Sell X with minimum price impact

4). Sell X with maximum price impact

5). Buy X with minimum price impact

6). Buy X with maximum price impact

7). Sell X with minimum price impact

8). Sell X with maximum price impact

... and on and on forever.

 

There are a lot of good papers out there now on how to maximise and minimise price impact when trading a consolidated order book.

 

 

The problem with HFT is that algo's will be become more and more correlated with one another, they make more money if they fall into lockstep i.e. if they all accumulate together and all maximise price impact together. This is bad as it greatly increases price volatility and by extension, systemic risk.

Wed, 01/08/2014 - 18:24 | 4313165 Odin
Odin's picture

This is Jack's total lack of surprise.

Thu, 01/09/2014 - 00:17 | 4314271 Race Car Driver
Race Car Driver's picture

> This is Jack's total lack of surprise.

I'm beyond any surprises. At this point in the game, it's surreal or nothing. Anything can and will happen once we started swirling the bowl at this speed. Tech brings the future ever shorter distances away - clickity-click - everything is virtual, unprecedented, relative and cartoon-like. The walls of this construct are closing in, but it's more like a looped gif. A complete illusion - magic, perhaps. Just when it looks like they're gonna hit you in the face, they zoom out and start the sequence over again.

Admittedly, I didn't see this coming. This lull where everything stays twisted, perverse and corrupt. This balancing on the knife edge going on so long, never tipping too far to the port nor the starboard ... never falling off ... just whirling along a dull razor's edge at an ever increasing breakneck speed to, where, exactly? And what's really gonna be left of us once we get there?

The litany of problems facing not only our species, but every species on this planet (see: mass animal die-offs), and specifically, man, both natural and man-made, probably hasn't been this long in millennia. It's biblical. From extreme weather, to food, to anti-biotic resistant disease, to GMO, to pollution and toxic environments, to space weather, to earthquakes and volcanoes ... it just goes on and on. And, I don't want to hear that it's always been like this - because it hasn't. And anyone over 40 knows this.

And, Atheism starts to look more and more like a joke of a belief system when one sees the intensity of the worship of evil, perversity and corruption that the fat-cats who run this joint involve themselves in.

What a brave, new world we have here. What a gleaming pile of shit it is ... I gotta wear shades.

Mon, 01/13/2014 - 18:43 | 4328648 MeelionDollerBogus
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dafuq?
All the worst people doing the worst damage to you right now are avowed non-atheists, be it Catholic/Christian, Jew or Muslim (mostly not Muslim, as a matter of fact).
Atheists don't fuck around with belief systems.

Wed, 01/08/2014 - 18:37 | 4313182 philipat
philipat's picture

The patterns are now so obvious and shameless that there can only be one possible explanation. This time, the 1245 level was technically significant and was defended.

The Fed obviously intends to scare everyone away from Gold. The only hope is that they are running out of physical Gold to cover the games and that they might finish up by destroying the paper markets they so desperately need to manipulate Gold After all, why would any real trader want to take the other side of a BB trade in a market which is so blatantly manipulated?

Wed, 01/08/2014 - 19:47 | 4313353 Ham-bone
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Take a gander at who's bought all that new Treasury supply...not just the Fed, it's foreigners who love our liberty and low yielding bonds...(based on TIC reports)

Global "foreign" holdings of US Treasury....Fed......total outstanding public debt

Dec '00 - .............$1 T  ...................$200B*................................$3.3 T

Dec '07 - ............$2.35 T .................$400B*..............................$5.1 T

Oct '13 - ............$5.65 T  .................$2.3 T**..............................$12 T

* mostly short end bills

** almost entirely long end bonds

Now look @ individual country increases, Jan '07 to '13???:

China $400 B ---> $1.3 T

Japan $600 B ---> $1.2 T

UK $100 B ---> $158 B

Brazil $54 B ---> $246 B

Taiwan $38 B ---> $185 B

Russia $9 B ---> $150 B

Ireland $19 B ---> $111 B

Belgium $13 B ---> $180 B

"carribean banking centers" $68 B ---> $291 B

"oil exporters"  $112 B ---> $237 B

Luxembourg $60 B ---> $133 B

Norway $20 B ---> $78 B

France $10 B ---> $60 B

Singapore $30 B ---> $86 B

Switzerland $34 B ---> $174 B

India $15 B ---> $60 B

Thailand $16 B ---> $45 B

Canada $28 B ---> $58 B

Minor movers...???

Germany $50 B ---> $60 B

Italy $14 B ---> $29 B

Netherlands $15 B ---> $30 B

Turkey $25 B ---> $50 B

None appear to be leaving the treasury table...not sure if they are given money via swaps or promised "something" (gold???) to keep buying or if they are simply so weak they'll do anything to prop up the system.  But nothing data wise sez this is bout to come unhinged.

Point is all these nations and many more are actively supporting the dollar system (regardless their yapping) and seems in all their interest to maintain dollar and help keep a lid on rates, lid on PM's, lid on commodities, and print ad nauseum.  Not surprising gold is going nowhere when every country has it in their best interest to smack it down.

Probably also notable that the PIIGS have been so busy running their own LTRO that they are full to the gills of their own nations debt and do not appear on the list (except the curious exception of Ireland??? wonder where they got all those $'s while also going through their own bailouts???)...

Wed, 01/08/2014 - 19:48 | 4313418 fonzannoon
fonzannoon's picture

Ham-bone thanks for those numbers,

Wed, 01/08/2014 - 20:00 | 4313465 Ham-bone
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I get it that Brazil or China or Japan running trade surpluses and trying to maintain weak currencies see it in their favor to buy Treasury debt....but WTF w/ Belgium?, or Ireland?, or many others...not sure what sort of rational explanation could be given?  Where exactly did the cash come from???

And rationally why would these nations continue to hold these and buy moar as the Fed tapered and US trade deficit is shrinking?  Becoming ever more dollar dependent rather than the independence so many logically would expect of these countries???  Enjoying opposite world every day.

Wed, 01/08/2014 - 20:17 | 4313525 philipat
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How about the same data for the period 2011-2013. Does that still show the same trend?

Wed, 01/08/2014 - 20:36 | 4313622 Ham-bone
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Jan '08 $2.4 T

'09 $3 T

'10 $3.7 T

'11 $4.4 T

'12 $5.1 T

'13 $5.6 T

Oct '13 $5.65 T

seems main reason for slowdown in '13 was debt ceiling freeze (only issued $650 B in '13) while QE was buying up $540 B...but since debt ceiling raised, Treasury has issued over $600 B since Oct 17 to catch up.  Don't really see any trend changes or anybody selling off.

here's the source data...

http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfhhis01.txt

Wed, 01/08/2014 - 20:45 | 4313664 Occident Mortal
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http://3.bp.blogspot.com/-oNV2fzyJlSg/UNZWs-0BozI/AAAAAAAAAlw/mUFl9Y5Ptg...

China hasn't bought Treasuries for almost 4 years.

Wed, 01/08/2014 - 20:51 | 4313684 Ham-bone
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curious where that info comes from?  Not saying the info I share is correct but it comes from the Treasury TIC report...which like everything else should be viewed skeptically.  Not beyond the pale these are all being held in the US financial entities w/ assignment to foreigner although money for "purchase" came from "other" sources...I'm open to all possibilities because none of this makes sense...

http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfhhis01.txt

Thu, 01/09/2014 - 00:02 | 4314230 Soul Glow
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The Kool Aide trick doesn't work unless everybody drinks.

Thu, 01/09/2014 - 00:52 | 4314364 philipat
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@Ham-bone

Your data would mean something if presented BY YEAR over the period you elect. You should include "Others" (That is, The Fed via QE). That data would indicate that the major purchasers have, in recent years, significantly scaled down purchases, offset by significantly increased Fed purchases. (aka unsterilised money printing).

 

Nice try.

Thu, 01/09/2014 - 02:07 | 4314498 Ham-bone
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 as posted above...

 

"foreign" held US Treasury's....Fed......total outstanding public debt

Dec '00 - .............$1 T.........$200B*.......$3.3 T

Dec '07 - ............$2.35 T ....$400B*..........$5.1 T

Oct '13 - ............$5.65 T.....$2.3 T**.......$12 T

* mostly short end bills

** almost entirely long end bonds

Jesus, man, I gave you everything including the source data, go look at the f'ing data...make of it what you will but crystal clear the only purchaser scaling back is the domestic US institutional buyers (pensions, insurers, etc.)...nearly all major foreign nations are at record holdings alongside the Fed.

 

Thu, 01/09/2014 - 05:03 | 4314648 philipat
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Sorry, I should have said BY YEAR BY BUYER, including "Others" (The Fed). Then we can get somewhere. Would it not be correct that China alone has, over the period 2011-2013, reduced its total UST positions from about $ 2.4 Trillioin, to about 1.2 Trillion? Of course, offset by Fed purchases. So what, actually, are you trying to prove here??

Thu, 01/09/2014 - 08:38 | 4314773 TheTruther
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Here are the numbers by buyer and month for a twelve month period.

 

MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES (in billions of dollars) HOLDINGS 1/ AT END OF PERIOD Oct Sep Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct Country 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2012 2012 2012 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ China, Mainland 1304.5 1293.8 1268.1 1279.3 1275.8 1297.3 1290.7 1270.3 1251.9 1214.2 1220.4 1183.1 1169.9

 

SOURCE:

www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

 

 

 

Mon, 01/13/2014 - 18:40 | 4328643 MeelionDollerBogus
MeelionDollerBogus's picture

ooh, now this is embarassing.

Wed, 01/08/2014 - 20:54 | 4313693 Jack Napier
Jack Napier's picture

Nobody is printing more money than China right now. It's less unprofitable for them to buy our treasuries because they devalue at a slower pace than their own money. They are buying everything; gold, rare earth metals, real estate, heck even clues according to unnamed sources. That doesn't mean it's a good buy, just a prettier pig.

Wed, 01/08/2014 - 19:49 | 4313425 new game
new game's picture

yep, seeing the same thingy. unhinged-huh, they got er all oiled up for smooth squeaky free operation.

dollar kingy for a while moar...enjoy the stability-eh!

Thu, 01/09/2014 - 12:50 | 4315661 TheReplacement
TheReplacement's picture

My name is China.  I want the US to fail but I really want that failure to be spectacular so I will help inflate the bubble to the point of absolutely no return whatsoever.  I will own the US when this is over.

My name is Japan.  I'm just a friggin' idiot.

My name is UK.  I'm gonna ride the fence and jump on the winner's bandwagon at the right time.

My name is the rest of them.  I am manipulated or bullied to oblivious.

Wed, 01/08/2014 - 16:56 | 4312811 Long-John-Silver
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Buy Physical Gold for Delivery while it while it's on clearance sale!

Wed, 01/08/2014 - 17:03 | 4312834 Boris Alatovkrap
Boris Alatovkrap's picture

Gold Fatfinger is better than is Cesium 137 fat finger. Recommend not to handle personal stash of unstable heavy metal isotope without thick leather glove.

Wed, 01/08/2014 - 17:03 | 4312838 synergize
synergize's picture

d

Wed, 01/08/2014 - 17:09 | 4312844 nope-1004
nope-1004's picture

Gold must be smashed.  The survival of the USD depends on it.  It won't breach 1250 until revaluation.  Patience, as the government publicly displays their desperation as documented above.

 

Wed, 01/08/2014 - 17:13 | 4312865 mickeyman
mickeyman's picture

Goldthumber

Wed, 01/08/2014 - 17:26 | 4312924 SoilMyselfRotten
SoilMyselfRotten's picture

It wasn't a fat finger, it as a fat fuck, and she just started he new job.

Wed, 01/08/2014 - 17:32 | 4312950 eclectic syncretist
eclectic syncretist's picture

Our taxpayer dollars at work, LOL.

Wed, 01/08/2014 - 18:39 | 4313196 philipat
philipat's picture

Boris,

I recommend shorting the Cesium-137 half life in the paper market?

Wed, 01/08/2014 - 17:25 | 4312919 Tinky
Tinky's picture

"It won't breach 1250 until revaluation."

Care to place a substantial wager on that assertion?

Wed, 01/08/2014 - 18:16 | 4313135 ParkAveFlasher
ParkAveFlasher's picture

WTF does "revaluation" mean?  The Fed still thinks it's thrty bucks per ounce or something to that effect.

Wed, 01/08/2014 - 19:39 | 4313386 KingFiat
KingFiat's picture

The Fed has no clue.

Wed, 01/08/2014 - 22:17 | 4313953 WmMcK
WmMcK's picture

$42.22

Wed, 01/08/2014 - 22:33 | 4313993 akak
akak's picture

Yeah, and Britney Spears is still a virgin.

Wed, 01/08/2014 - 18:34 | 4313193 disabledvet
disabledvet's picture

That's all the silver we irradiated for the Manhattan Project. The gold was not effected....or is affective?

Wed, 01/08/2014 - 19:38 | 4313380 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is sometime read Manhattan Project. Is borrow much silver from treasury but when is done, 1946, is recover and return EVERY OUNCES! Compare Wall Street Project where bank is borrow $3T and is not return single dime.

Wed, 01/08/2014 - 17:11 | 4312859 Jim B
Jim B's picture

There is probably an short in another security or futures contract that reacts to the smash down....  Maybe the HUI index

Wed, 01/08/2014 - 19:06 | 4313277 Againstthelie
Againstthelie's picture

It is even more funny, that it is claimed HFT provides liquidity.

Thu, 01/09/2014 - 00:13 | 4314261 Dane Bramage
Dane Bramage's picture

"yet the sum of the sizes of each group totals exactly 338"...

 

that number keeps coming up for me on ZH of late (at least tangentially).  First in the Winter War article (Finnish Sniper Simo Häyhä), then in the 2013 record firearms sales article... now a HFT algo?  This is too odd.  Imma gonna go clean my Sako TRG42 (.338 Lapua Magnum), jic.  :-)

Wed, 01/08/2014 - 16:53 | 4312801 Event Horizon
Event Horizon's picture

Do you expect me to talk,,,

No. Mr (US) BOND I expect you die......

 

http://www.youtube.com/watch?v=U1TmeBd9338

Wed, 01/08/2014 - 16:56 | 4312802 Cognitive Dissonance
Cognitive Dissonance's picture

Yes. But whose HFT algo gone wild?

<Enquirering minds would like to know.>

Wed, 01/08/2014 - 16:58 | 4312818 y3maxx
y3maxx's picture

""Yes.
But WHOSE HFT algo gone wild?
Enquirering minds would like to know.""

...Answer, Insiders at the NSA of course.

Wed, 01/08/2014 - 17:08 | 4312845 Tall Tom
Tall Tom's picture

My bet it is someone working for Goldman Sachs or JP Morgan Chase.

 

The NSA wants to screw with the Foreign Exchanges. The leave the FED with the member Banks to conduct Domestic Financial Terrorism.

 

Just find out who is the quant, find him, and neutralize him...on a Cross. Crucify him.

Thu, 01/09/2014 - 00:11 | 4314252 Soul Glow
Soul Glow's picture

China could be behind a lot of the manipulation.  Dropping price on the paper market and picking up the physical.

Wed, 01/08/2014 - 17:16 | 4312879 maskone909
maskone909's picture

funny,

i dont think this shit happens in other futures markets, does it?

did wheat, corn, and soybeans have 6 stop logic events in one year?

 

Wed, 01/08/2014 - 17:48 | 4313018 Clint Liquor
Clint Liquor's picture

It's a random event, which is why it is always down and always includes Silver. You know Silver, it's the 'Industrial Metal.

Wed, 01/08/2014 - 18:41 | 4313214 Temporalist
Temporalist's picture

Yes these reoccurring random events are completely typical and expected like AM/PM price performance...just like Jeffery Christian always said.

Wed, 01/08/2014 - 19:39 | 4313384 BigJim
BigJim's picture

 did wheat, corn, and soybeans have 6 stop logic events in one year?

Of course not! That's an honor that can only happen when when some moustachioed pederast has declared them a barbarous relic.

Wed, 01/08/2014 - 18:41 | 4313215 disabledvet
disabledvet's picture

Exactly. This thing REEKS of Washington DC...the Banks? hahaha. they're (mostly?) long this market. this trade is the financial equivalent of the Paris Gun so "as with XOM buying at what it thought was the low" (only to watch it go WAY lower) so the Banks may end up doing with gold. the irony that the biggest money from the collapse is securitized debt is quite striking. "minting" as well apparently. And now Goldman is all in on that crap again? hahahahahaha. you really can't make this up. "I now own YOU!"

Wed, 01/08/2014 - 16:56 | 4312803 Al Huxley
Al Huxley's picture

This is why in the farce that is the paper gold market (and related securities like mining shares) I never use stops, and always have a ridiculously out of the market bid standing.

Wed, 01/08/2014 - 17:05 | 4312843 Rainman
Rainman's picture

I'm pretty sure the machines know how to gut out all human retail bids...up or down.

Wed, 01/08/2014 - 17:10 | 4312852 Al Huxley
Al Huxley's picture

Yes, you're probably right.

Wed, 01/08/2014 - 18:46 | 4313226 disabledvet
disabledvet's picture

The English called the Pacific Ocean "an American lake" after World War II. "so if your meteor is a little of off you should still be able to hit that thing. Hopefully. God for forbid if it splashes down on Beijing....in 1945.

Wed, 01/08/2014 - 16:55 | 4312809 Sufiy
Sufiy's picture


David Morgan's 2014 Silver Survival Guide

  David Morgan shares his outlook for Silver and Gold markets in 2014. This discussion provides the very good explanation how the Silver, Gold markets and Bullion banks are functioning. COMEX, LBMA and other industry organisations are explained in a very comprehensive way and it will help you to cut to the bone through the jargon studying these market.

 

http://sufiy.blogspot.co.uk/2014/01/david-morgans-2014-silver-survival.h...

Wed, 01/08/2014 - 16:59 | 4312821 Pladizow
Pladizow's picture

Too bad he's been completely wrong for 2.5years!

Wed, 01/08/2014 - 17:20 | 4312893 nope-1004
nope-1004's picture

Not sure why you got junked.  I like David Morgan, but still confess he has been wrong.  The entire thing is manipulated to shit.  So, what Plad said is correct.  He has been wrong, as has Sinclair, Turd, McGuire, Sprott.... doesn't mean he or they are disliked.  Facts are the facts.

Let's keep it real here.... has he been right?  Have any of us?

 

Wed, 01/08/2014 - 17:24 | 4312915 jomama
jomama's picture

every time i crack open a fresh shipment of phyzz, that feels right.  if it's wrong, i don't want to be right.

Wed, 01/08/2014 - 17:52 | 4313022 HungryPorkChop
HungryPorkChop's picture

There has been one that's been right based on a prediction from early 2012.  He's stating gold plunges below $1,000 and stops trading and then revalued big time.  The fake gold paper derivative ponzi scheme crap may continue to burn down to its true worth which is only a few hundred dollars.   Buy phyzzzz or go home!

Let the games continue!

 

Wed, 01/08/2014 - 18:29 | 4313177 Yardfarmer
Yardfarmer's picture

yeah, join the crowd. everyone's almost always fucking wrong. at least until they aren't. oh wait..i forgot the Fed is always right! yeah, right...

Wed, 01/08/2014 - 18:45 | 4313223 Jaspergers
Jaspergers's picture

Nope!

Wed, 01/08/2014 - 18:52 | 4313238 Smiddywesson
Smiddywesson's picture

Yes, but all those fellows made money being wrong, and their clients lost money.  So I guess they were right, from a personal perspective.

Wed, 01/08/2014 - 17:03 | 4312813 Tall Tom
Tall Tom's picture

Find and neutralize the quant who wrote the algo. If the quants believe that they will not be held accountable, post collapse, they are deluded. They are smart enough to be held as totally responsible for the oncoming collapse.

Wed, 01/08/2014 - 17:04 | 4312840 Canuckistan Al
Canuckistan Al's picture

Agreed, I'm guessing anyone here on ZH knows in his/her heart of hearts that this whole ponzi will implode one day soon and the "bots" will be the final Black Swan.

Wed, 01/08/2014 - 17:04 | 4312842 Canuckistan Al
Canuckistan Al's picture

Agreed, I'm guessing anyone here on ZH knows in his/her heart of hearts that this whole ponzi will implode one day soon and the "bots" will be the final Black Swan.

Wed, 01/08/2014 - 17:21 | 4312894 jomama
Wed, 01/08/2014 - 17:28 | 4312929 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

on the first of "Never"

Gold is broken, bitches, get over it

Wed, 01/08/2014 - 17:54 | 4313058 HungryPorkChop
HungryPorkChop's picture

Only the "paper" gold derivatives are broken.  The real phyzzzz will shine shortly as the paper goes to its true worth.  Enjoy the show.

Thu, 01/09/2014 - 00:37 | 4314326 Soul Glow
Soul Glow's picture

Man Zero Hedge is going to be fuckin' rich.  We should start our own government.

Mon, 01/13/2014 - 17:57 | 4328521 MeelionDollerBogus
MeelionDollerBogus's picture

shit, really? The laws of physics changed? No? Then it's not broken.

Wed, 01/08/2014 - 17:30 | 4312945 maskone909
maskone909's picture

i will dissagree respectfuly,

quants are as responsible for the collapse as bill gates is for spam.

think glass steagal

Wed, 01/08/2014 - 16:59 | 4312817 Dr. Engali
Dr. Engali's picture

SEC "analyst": Hey wtf are these squiggly lines, and who scrambled the porn channel?

Wed, 01/08/2014 - 19:21 | 4313332 toothpicker
toothpicker's picture

+10

Wed, 01/08/2014 - 16:59 | 4312823 maskone909
maskone909's picture

waddell and reed strike again!

Wed, 01/08/2014 - 17:00 | 4312826 withnmeans
withnmeans's picture

No, they know what their doing, they have to get rid of their useless paper. They do not want to end up with nothing in the end, they will get what they can, when they can !!!

One day there will not be a paper gold market, then it will be repriced in Physical "then there will be a price hike like a hockey stick".

 

Carry on, nothing new here

Wed, 01/08/2014 - 17:46 | 4312998 Renfield
Renfield's picture

Yup. The 'confiscation' so many goldbugs have worried about? Guess what: that's what's happening now.

This paper-market manipulation has the SAME effect as Roosevelt's force-of-law confiscation did in the '30s: to shake out the weak hands. The mark, being told by the government/corporate propaganda machine that their gold is now worthless, duly hands it over to their betters for whatever fiat price has been decided by those same betters. (Parm me, I mean, the 'free market' or something like that.)

Then the price mysteriously rises after all weak hands have been shaken out.

This is a much better method of bullion collection, in fact. Doesn't involve any government threats or open coercion. Just deceit. The result being the same: those who fall for it lose their gold, which goes to the cartel nice and cheap, all at govvy-set 'market prices'.

No need to resort to confiscation when deceit is enough. Much more effective this way. And at least I don't have to worry about some agent showing up around my fishing dock with a metal detector.

Wed, 01/08/2014 - 17:52 | 4313043 Duke of Earl
Duke of Earl's picture

Love this conspiracy theory explanation.  I think I buy it.  +1

Wed, 01/08/2014 - 18:38 | 4313208 Ghordius
Ghordius's picture

why "conspiracy theory"? It's the opposite of that.

the strongest hands are the CBs and the bullion banks. Unlimited funds, looooooong time frames, btw

that's reality. If you play the gold game, remember you are playing in the Sovereign League

Wed, 01/08/2014 - 18:56 | 4313252 disabledvet
disabledvet's picture

bullion banks...yes. they never trade gold...only paper...and only with the paper they have so they can only lose what they have put in. that's no true of Governments which "demand gold for worthless paper" as a matter of "right." Well, at least until QE and Taper came along. That has forced Governments to "get yer own darn gold!" Only the USA and Russia are capable of that as near as I can tell. Incredibly though in the USA it is possible Morgan/Stanley might be able to through Space X and ORB might be able to. "And yes, that will crash the price of the metals complex." silver, platinum, palladium, you name it. probably not pennies but quite possibly...even likely..."mere dollars."

Thu, 01/09/2014 - 00:49 | 4314324 HamFistedIdiot
HamFistedIdiot's picture

Agree that gold holders who are susceptible to propaganda and have no idea what money really is are being fleeced right now. "It's just gold, and its value in currency is dropping like a rock. I want out." But anyone who is educated about what the Fed and its debt based instrument IS, will not let any gold or silver go, and certainly not at these valuations. But a lot of the gold bugs are of recent mint and only stuck with it while prices were rising. It takes a LOT of fortitude to experience these downward pressures and STICK with your regular accumulation of physical. You need a strong knowledge base on the politics and endgame of the frauds being committed.

I am not so confident that this is the only way the gov will try to rip us off. If PMs do see a major revaluation, I believe there is a good chance that private ownership may be made illegal, or PM sales will be taxed at some exhorbitant rate. If gold is $10K and silver $200, and we DON'T have to pay an 80% tax, I will breath a sigh of relief. I think there will be a LOT of noncompliance if the feds take such punitive action, however. Smart people will do everything they can to barter, sell and trade PMs under the radar.

Wed, 01/08/2014 - 17:09 | 4312853 Save_America1st
Save_America1st's picture

ooooops....busted again, ay???  And who else is reporting this?  Yeah, that's right bitchez...fuckin' nobody else, that's who.  At least nobody in the state-run propaganda, eh-hem, "media" outlets.  Those fucking puppets don't only ignore the criminality, but they don't have a clue what it all means either.  Just paid BAD actors to recite all the lies they're told to recite hot off the teleprompter.  Same as obamgo does.  99.99% of the sheeple have no clue what any of this shit means either, so it's a Win-Win for the Marxist scumbags running/ruining everything they get their greedy little fucking hands on.

Oh well...as a stacker I sure can't complain about criminally manipulated paper prices that drive down the amount of fiat toilet paper it takes for me to trade in for real phyzz.  I'll take it as long as I can get it.

So keep stackin' the phyzz, folks...it's going fast off the shelves and when it's gone...it's fucking GONE...

 

Wed, 01/08/2014 - 17:19 | 4312860 russwinter
russwinter's picture

Obviously from one whale, I mean source. 

Open letter to gold investors: Will the Real Manipulator Please Stand Up.

http://winteractionables.com/?p=8647

 

Wed, 01/08/2014 - 17:19 | 4312876 highwaytoserfdom
highwaytoserfdom's picture

no HFT for primary dealers..  simple   but that is  the futures markets.. Hey just send the primaries to the dark pools where they can use FISA court to steal pensions and lever swaps.  AKA known as Greece Cypress , Portugal Spain...     and why is it again that Petro China is bigger than Exxon?       

Lay off the HFT the 10b club deal(Bain Capital, Blackstone, Goldman Sachs Capital, Texas Pacific, Providence Equity Partners, KKR)  market software has to be paid for... God (Lloyd) help us...  we need to keep the crony usury game up.    Oh KKR has Petraeus  protecting keeping us safe...

"The Rothschilds, and that class of money-lenders of whom they are the representatives and agents -- men who never think of lending a shilling to their next-door neighbors, for purposes of honest industry, unless upon the most ample security, and at the highest rate of interest -- stand ready, at all times, to lend money in unlimited amounts to those robbers and murderers, who call themselves governments, to be expended in shooting down those who do not submit quietly to being robbed and enslaved." by: Lysander Spooner
(1808-1887) Political theorist, activist, abolitionist
Source: "No Treason #6" (1870)


Wed, 01/08/2014 - 17:51 | 4313040 agent default
agent default's picture

Nah, just charge something like 1 cent for every quote.  Nothing if you are a human trader but at a few million quotes a minute, it piles up.

Mon, 01/13/2014 - 17:45 | 4328485 MeelionDollerBogus
MeelionDollerBogus's picture

then just add 1.5 cents to the liquidity market-maker payback & it counter-acts. Again.

Mon, 01/13/2014 - 17:47 | 4328486 MeelionDollerBogus
MeelionDollerBogus's picture

and find out that suddenly markets are so "unstable" (a lie, of course) that only HFT's be permitted to trade them while mere humans are forced by regulation into much more stable bonds and only traded by brokers with HFT's if not sold directly to you.

Wed, 01/08/2014 - 17:17 | 4312884 jomama
jomama's picture

where's that asshole bart chilton when you need him?

Wed, 01/08/2014 - 17:23 | 4312910 maskone909
maskone909's picture

bleaching his taint.

Wed, 01/08/2014 - 17:25 | 4312917 nope-1004
nope-1004's picture

Before someone answers where his is, I'd like to know first:  What's he good for?

 

Wed, 01/08/2014 - 17:19 | 4312890 Michelle
Michelle's picture

Me thinks a concerted effort is about to disrupt the markets.

Wed, 01/08/2014 - 17:22 | 4312898 MK ultra
MK ultra's picture

I wish they would pound it down to $840 again.

Got a hot stack of FRN's just waitin for it.

Wed, 01/08/2014 - 17:34 | 4312938 Kaiser Sousa
Kaiser Sousa's picture

all perfectly normal.....

NORMAL FUCKING MONECHANGER FRAUD!!!!

FUCK ALL U BITCH ASS BANKER SCUM...

DEATH TO U ALL!!!!!!

Wed, 01/08/2014 - 17:29 | 4312940 DollarMenu
DollarMenu's picture

All of this post-event analysis is a true technical tour de force but, in the end, amounts to no more than Monday morning water cooler fodder.

No one seems to care much - there are no playoffs, no home teams to root for, no officials to invoke any rule book, certainly no penalties involved,  except perhaps some loss to the players in this crooked game.

Just like letting kids play with matches, things will be o.k. until they are not.

Wed, 01/08/2014 - 17:38 | 4312977 Sufiy
Sufiy's picture


Casey Research: 23 Reasons to Be Bullish on Gold Price 2014

 Casey Research provides a very good compilation for the Gold market outlook going forward.

http://sufiy.blogspot.co.uk/2014/01/casey-research-23-reasons-to-be-bull...

Wed, 01/08/2014 - 17:39 | 4312980 moman
moman's picture

Any perso,place or thing SHORT gold here has got to be "dummer than daug chit"!

Wed, 01/08/2014 - 17:48 | 4313016 realWhiteNight123129
realWhiteNight123129's picture

My stance has been since 2012:

 

SHORT TREASURIES BITCHEZ.

This is the way you attack the Fed. It is obvious in today´s FOMC statement.

But this is an ambush, most likely you have a bear market rally in TSYs.

At that point you go for the jugular. Tit for that.

Those guys attack bullion we go after the Treasuries. THose guys are boxed with the TSY. If the market does not cooperate with teh Fed, the Fed is toast and they know it. Given the state of affairs and debt, they can not win. They will have to print to oblivion or surrender and the US will have to default.

 

 

Wed, 01/08/2014 - 18:04 | 4313092 GFORCE
GFORCE's picture

How sad that you're out to defend your bullion... Don't get married to a trade. You will lose your shirt. Again. Prob been long since 1800.

Mon, 01/13/2014 - 17:41 | 4328474 MeelionDollerBogus
MeelionDollerBogus's picture

bullion is not a trade.
Holding bullion is like holding food, water, ammo, medicine, etc., for survival.
Paper & electrons are trades.
Solid tangibles are holdings. Not trades.

Wed, 01/08/2014 - 19:05 | 4313272 disabledvet
disabledvet's picture

"technically speaking" I'm aging a double top trade at this point. (obviously I'm not trading just long treasuries.) as with the spectacular double top in gold on the announcement of QE so we'll see how "the unknown able" (Tapir) is priced in. Clearly the bankruptcy of Detroit didn't scare anybody. "logically then one should throw in ten more even bigger Cities just for fun." Obviously I am not for this outcome obviously. the writer in me says "tis ironic indeed."

Wed, 01/08/2014 - 17:48 | 4313019 vincent
vincent's picture

Dear Criminal Racketeers,

Please don't blow shit up yet.  I need more time.

Thank you.

Sincerely,

A responsible US Merican

Wed, 01/08/2014 - 17:50 | 4313027 hedgelessWhoresMan
hedgelessWhoresMan's picture

Stop picking on the Plunge Protection Team. They're not quite up to date with the latest technology.

Wed, 01/08/2014 - 17:50 | 4313031 withglee
withglee's picture

Add a random number of seconds to the order entry time and the problem goes away. With a solution that simple, it's clear ... current gaming of the market isn't a problem, it's a feature.

Mon, 01/13/2014 - 17:39 | 4328468 MeelionDollerBogus
MeelionDollerBogus's picture

A) will be applied to no one because they built those short-distance fiber cables for a reason
B) will be applied to everyone so you can add x seconds BUT every trade will still  be front-running & will still fill you last, if ever.

Wed, 01/08/2014 - 17:51 | 4313041 MFLTucson
MFLTucson's picture

The corruption and the lies are so deep in American finacial markets; you would be a fool to even acknowledge what this group of shit has to say!  

Wed, 01/08/2014 - 17:54 | 4313055 Hongcha
Hongcha's picture

This is just flat fucking insane.  What a day for news :0)

Wed, 01/08/2014 - 17:54 | 4313060 Know shit
Know shit's picture

Our believes are tested I guess (for some)?
Ordered some maples a day to soon but what the heck, being down under since I started buying :)

But the biggest worry getting bigger each order?

Will I get my physical this time ?.........

Easy come easy go is what my mother told me, guess she was right with some things after all......

Wed, 01/08/2014 - 18:02 | 4313088 GFORCE
GFORCE's picture

Big money is shunning gold for positive returns elsewhere. Doesn't really matter how it falls. Nobody wants it right now, not even China.

Wed, 01/08/2014 - 18:08 | 4313108 Clint Liquor
Clint Liquor's picture

It must be fun to create your own reality.

Wed, 01/08/2014 - 18:18 | 4313141 Bastiat
Bastiat's picture

The "not even China" part was my favorite.

Wed, 01/08/2014 - 19:07 | 4313282 DaddyO
DaddyO's picture

All the numbers to the contrary are just a mirage, eh?

China is a binge gold buyer, they binge at every opportunity.

DaddyO

Thu, 01/09/2014 - 00:45 | 4314349 Soul Glow
Soul Glow's picture

The banks and the people.  The Chinese are a very savy people who haven't forgotten the times when the West (British Empire and USA) fucked them over (Opium Wars and such).  They teach the kids in the schools about that, and they remember what money looks like.

Hint, it looks like gold.

Wed, 01/08/2014 - 19:09 | 4313288 disabledvet
disabledvet's picture

Japan hyperinflates with China right behind them. "Chiang Kai Shek laughs his balls off."

Wed, 01/08/2014 - 19:07 | 4313281 Al Huxley
Al Huxley's picture

Wow, winner of the 'dumbest fucking troll of the day' goes to GFORCE.

Mon, 01/20/2014 - 09:01 | 4347777 Agstacker
Agstacker's picture

Buy moar stawks!

Wed, 01/08/2014 - 18:03 | 4313089 Bobbyrib
Bobbyrib's picture

I got an email from Gainesville Coins that they are selling 2013 Silver Eagles for $2.99 "until supplies run out." Wish I had some money..

Wed, 01/08/2014 - 18:18 | 4313147 Bastiat
Bastiat's picture

For $2.99 I'm sure supplies already ran out.

Wed, 01/08/2014 - 18:25 | 4313169 jomama
Wed, 01/08/2014 - 18:05 | 4313094 Clint Liquor
Clint Liquor's picture

Where is the usual idiot with the 'why don't you call it manipulation when it goes up'?

Wed, 01/08/2014 - 18:18 | 4313143 Saucy-Jack
Saucy-Jack's picture

FOFOA is pretty much the only one who called the paper meltdown prior to the revaluation.

Wed, 01/08/2014 - 18:18 | 4313144 Saucy-Jack
Saucy-Jack's picture

Gold to $500 soon.

Wed, 01/08/2014 - 19:07 | 4313283 Al Huxley
Al Huxley's picture

If I'm really lucky.

Mon, 01/13/2014 - 17:34 | 4328453 MeelionDollerBogus
MeelionDollerBogus's picture

500 / GRAM, yes indeedy.

Wed, 01/08/2014 - 18:20 | 4313152 Motorhead
Motorhead's picture

Well, that oughta get the wankers at King World News riled up!

Wed, 01/08/2014 - 18:20 | 4313153 b_thunder
b_thunder's picture

4200 contracts X100oz X $1230 = half a billion bucks.  seems prety "rich" for even largest HFT shops.

Unless this wasn't an HFT shop...

 

Wed, 01/08/2014 - 18:32 | 4313183 GrinandBearit
GrinandBearit's picture

Looks like a bunch of ga-bull-de-gook to me.

No use trying to figure it all out... simply take advantage of these fire sale prices and stack as much as possible.

Wed, 01/08/2014 - 18:36 | 4313199 Papasmurf
Papasmurf's picture

I don't see this pattern discussed in Edwards & McGee.

Wed, 01/08/2014 - 18:40 | 4313211 godzila
godzila's picture

Interresting analysis... but what's the point of those trades ? How can you make a buck there ? Sorry I'm too dumb to figure it out !

Wed, 01/08/2014 - 18:41 | 4313213 tovar2
tovar2's picture

Sometimes some of us need just a simple cheat sheet paragraph...something that explains all the cool charts and colors after a long day.  Something along the lines of "Bankers screwed the public again, this time in gold"   I love the depth of info..but sometimes we just need a quick sentence or 2 on who the bad guy is and where we are suppose to point the rounds. 

Wed, 01/08/2014 - 18:48 | 4313227 El Hosel
El Hosel's picture

Looks like the 400 club was behind these trades.... Now who banged the close today?

Wed, 01/08/2014 - 18:48 | 4313229 Ulterior
Ulterior's picture

haha, back-and-forth trading == margin calls from retail

Wed, 01/08/2014 - 19:18 | 4313322 disabledvet
disabledvet's picture

retail? hahaha. "this is commercial scale." you don't just "move" oil and gold markets. "that takes product." in the case of the USA "one billion tons of coal a year."

Wed, 01/08/2014 - 18:51 | 4313235 RaceToTheBottom
RaceToTheBottom's picture

What sort of asshat programs this sort of stuff without testing it in advance.  This is equivalent to Healthcare website programming level of competence.

I get pretty tired of listening to supposed techies blabbing about how technically competent the WS rocket scientists are and then they do this Game programming 101 stuff.

Fire all their Asses and make WS liable responsible for the crap they have produced.

Wed, 01/08/2014 - 18:53 | 4313243 JohnnyBlaze
JohnnyBlaze's picture

Is oil being manipulated downward?  The oil/gold ratio charts don't look to be obscenely out of whack from what I saw in yesterdays posts.  As gold and silver continually get raped in the ass I started looking into shit like this and now I am even more fucking confused.  If one was to look at the oil/gold ratio it seems like gold is right around where the fuck it should be.

Wed, 01/08/2014 - 19:23 | 4313335 fijisailor
fijisailor's picture

So if it's algos and not fat fingers does that mean that the order was place only to be retracted simply for manipulation only?  Please explain.

Wed, 01/08/2014 - 19:41 | 4313394 OC Sure
OC Sure's picture

What exactly is the gripe against someone else who trades faster than others? How did you used to trade before electronic trading? There were dozens of guys shouting in the pits and if you weren't one of them then how did you trade? Didn't you use stops and limit orders along your predetermined path of least resistance? Removing the variable of rapidity, aren't the trading principles still the same? If you couldn't afford your own seat on an exchange, then you could still trade successfully. Likewise, if you can't afford your own cybernetic organism tapped into the programs, does that mean that you can't trade successfully? Are there exchange rules being broken by the HFTs?

Mon, 01/13/2014 - 17:27 | 4328429 MeelionDollerBogus
MeelionDollerBogus's picture

because they're only trading faster AFTER LOOKING AT YOUR TRADES, which is front-running, which is illegal.

Wed, 01/08/2014 - 19:50 | 4313429 fijisailor
fijisailor's picture

Here's an excellent article on the future of gold and the Asian future in the gold market.  Read it and learn.

http://www.ingoldwetrust.ch/gold-pricing-and-the-flows-of-gold-metal

Wed, 01/08/2014 - 19:55 | 4313451 Colonel Klink
Colonel Klink's picture

Interesting to see the fraud and manipulation in documentable video form.  Hopefully one day at trial, it will be called evidence.  If we get that far, sometimes in exigent circumstances due process is dispensed with.  Just like government does to its people.

Wed, 01/08/2014 - 20:30 | 4313603 jonjon831983
jonjon831983's picture

CBC Lang and O'Leary Exchange "Automated trading under microscope

Peter Nabicht is part of the lobby group making a case for high-frequency trading"

http://www.cbc.ca/player/News/TV+Shows/Lang+%26+O'Leary+Exchange/ID/2428770389/

 

Interview with HFT lobbyist.

Wed, 01/08/2014 - 23:16 | 4314114 Dr. Gonzo
Dr. Gonzo's picture

Just keep the sub $20 silver coming. I got nothing else to spend my money on. With the U.S. Mint at 42 million oz this year I figure coin and bar sales to be about 200 million oz world wide... not including whatever the big boys are doing at the Warehouses. Lets see what happens after 10 more years of this. Coin buyers aren't going away. 

Wed, 01/08/2014 - 23:55 | 4314207 ak_khanna
ak_khanna's picture

The stock, bond, commodity and currency exchanges have been reduced to gambling dens whereby the more powerful traders with deep pockets move the markets to maximize their own profits at the expense of the remaining not so powerful players. The big boys have enormous money power to move the markets in the direction which results in maximum profits for themselves. They effectively use the media to lure the other players in the market to a position where they would incur maximum loss.

The markets continue to rise till all short positions in the market are covered and the majority of traders move to the long side. Once this is done the market falls till all long positions are closed and short positions undertaken. Then rinse and repeat. The price mechanism has little to do with the actual demand, supply, fundamentals or state of the economy.

www.marketoracle.co.uk/Article40231.html

Thu, 01/09/2014 - 00:07 | 4314236 John___Connor
John___Connor's picture

Years ago I used to come to ZH for the controversial articles exposing the gold price manipulation. It felt great to read and gave me hope that once the knowledge of the covert systemic manipulation of the gold price went mainstream it would end and the price of gold would go to the moon. Well guess what, same old same old. Sorry to break it to you guys, but the whole world knows about gold price manipulation and no white knight is coming to fix it. Oh China? Hardly, why would they break a global financnial system where they are accumulting more assets than anyone else. If anything it is also in China's best interest to keep the price of gold down forever and I would not be suprised if they are also leasing into the market too. Congrats guys, you fingure out the price of gold is getting smashed down. Now you need to figure out it is never going to end. You can keep stackin" down to zero and be broke or move on. 

Thu, 01/09/2014 - 00:21 | 4314285 LongOfTooth
LongOfTooth's picture

Uhhhhh  I was with you right up until your conclusion.  Would you care to rethink that part of your post?

 

Thu, 01/09/2014 - 00:27 | 4314302 Tinky
Tinky's picture

Don't bother asking. He has sadly morphed into a Bittroll.

Thu, 01/09/2014 - 09:26 | 4314884 semperfi
semperfi's picture

I will keep stacking, thanks.  In 5 years we will see who wins - the stackers or the others.

Thu, 01/09/2014 - 00:23 | 4314293 Decimus Lunius ...
Decimus Lunius Luvenalis's picture

Contrived profits made from a contrived stock market.  Considering that Wall Street is purely a confidence game, who gives a fuck.  You bitch about a compter manipulating trades, I bitch about about the Fed providing zero-interest margin to bank prop desks.  And the wheels on the bus go 'round and 'round.

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