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And This Is How You Spike Markets In The New Normal
Because when you have no POMO, and no QE on the horizon, you can always break a stock exchange and send the entire market... higher!?
- *CBOE HAD 2ND PERIOD OF ISSUES W/ QUOTE DISSEMINATION TODAY
To wit: "The CBOE did not disseminate quotes between 11:45am CDT and 11:48am CDT in the following classes- DEM, DENN, DEPO and PCLN. All systems are operating normally."
And the result:
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I dont get it. If a market breaks how does that send stocks higher when it reopens?
Maybe you should be asking (a) what happened that preceded the "market" "breaking," and (b) what REALLY happened to the quotes, asks & bids during the time the "market" was "broken," for starters.
C'mon guys, relax ... nothing bad can happen until after the elections!
Regards,
Cooter
But what's that growing rumbling sound?
The stampede for the exits??
I was asking myself the same question.
Print MOAR electronic yen and buy MOAR DEBT, Kuroda-san!
http://headlines.ransquawk.com/headlines/japan-s-gdp-declines-for-the-fi...
News Headline Summary
Japan's GDP declines for the first time since April, according to Nikkei
- Japan's gross domestic product for September likely dropped 0.3% on the month in real terms, falling for the first time in five months, the Japan Center for Economic Research said Tuesday.
Update details:
- As a guide, Japan's next GDP announcement is scheduled on the 16th of November.
Print 18:16 - Economic Commentary - Source: BBG
TD should do a refresher on how market exchanges work. In the meantime
- Flash to exchange your thousand orders a pico-second.
- Before exchange gets those orders in the book, send cancel orders
- Market begins to fill those orders, which end up vanishing as soon as they are posted
- Sudden stall of volume leads liquidity algos to notice the spread is starting to widen and they too start to flash and send up large order quotes
Do steps 1 to 4, loop.
While that is going on, (1 to 4) other exchanges are pushing volume, and see the large burst in exchange activity, so that price becomes the volume-price. Feeding on 4.
That continues until the links can no longer keep up with the large volumes of quotes/bids. Like a good old dns attack, something breaks. Usually a standard NYSE glitch comes down to a platform desynching from the global volume price and needs to step out of the market since the volumes of phantom quotes are so stupidly large vs. what network programs were designed (in UDP architecture) to process, based on the network protocol standards drafted in the 70's.
SO when the market breaks, a bunch of orders continue to be sent, but they never cross; so the most active (manually traded) dealers will move the price based on their own local books. This is done from your own price quotes, and as such may be wildily different than the global price, since manual traders do not have access to the central order book which includes the dark exchanges and speed switches.Which is why you see global drift, and then gravity engages once people get the master-book back online.
While that break happens, algos and speed traders can do whatever they want, since local exchanges are printing tickets which may very well be 10bps wide from where the real volume-price tape is crossing at. Theoretically taking advantage of this arb. is illegal, as a human, but many will buy when exchanges break/misprice.
Which is why one should never market-order when exchanges go down. And it's getting more frequent, which means liquidity algos are being taken manually offline due to risk and volatility limits pushing them out of the market. Like 89.
Tyler, re: tracking on the internet (and those funky sidebar ads)>
http://recode.net/2014/11/03/reading-a-newspaper-vs-reading-news-on-the-...
+1.
Good job on the explanation.
Thank You.
+3 AVR
oh ok, thanks.
It sounds like you know what you are talking about. Unfortunately, we don't know if you know what you're talking about. :-)
Danke
Interesting description - thanks Rat.
It got me thinking: could much of this stock market levitation over the past few years be caused by:
(1) HFT quote-stuffing to pump bids, +
(2) Regular, mindless buying by sheeple (i.e. 401k and other retirement accounts on autopilot), +
(3) A lack of a serious reason to sell (e.g. huge GDP/earnings misses, epic economic news, etc.)
(4) Endless buybacks help too
Retail participation has declined, volume is low. I wonder (no evidence yet) if nearly all of the volume/bid is coming from 401k (autopilot) + buybacks (desperate to improve EPS, even leveraging to do so) + whatever the Fed and other CBs are doing? Is there data available to compare the magnitude of CB printing (or buybacks, or annual 401k contributions), to the change in S&P market capitialization? (i.e. which components contribute the most to S&P levitation?)
If I'm on the right track, then to get a significant market decline, one or more of the following must happen:
(a) Some significant news development that takes 401ks off autopilot, getting them to actually think critically about reality
(b) Failure in buyback growth (I thought we saw this to some extent, reported by ZH recently)
(c) CBs reducing their invovlement in the game (that one seems tough to determine -- is Fed QE really over, or is it going through a backdoor somewhere?)
Then someone hit Crtl-Alt-Del and reboots the system.
Ekm1 summed it up rather nicely; it's a video game, just drag that bitch up with your mouse.
Maybe if my computer breaks my boss will give me more money!
weird double post.
NY Fed is the only buyer. NSA and central command can't handle the whole thing and need a break.
Until the order comes to let it fill the black hole
Agree. It seems like they are absorbing the supply until the price stabilizes. Then they continually spray hundreds of small lot buy orders into the futures market to achieve the price objective.
Until the order comes to let it collapse
So if the exchange is broken value goes up - got it.
In other words, the exchange needs no pricing to ramp up.
Come on, are you fucking kidding me? I saw the market spike and wondered which Fed asshole said what. But it's this shit again.
"That's pretty", squeeled the Squid.
When in doubt, BUY!
So its election day hmm lets see who my choices are
Democrats: Jews
Republicans: Jews
Decisions decisions.
Who Controls the Economy? | Who Controls America?
Jews?
Dumb ass
So its election day hmm lets see who my choices are
Democrats: Luciferian Oligarch Puppets
Republicans: Luciferian Oligarch Puppets
Winner: Lucifer!
That chart has the S&P up 3 points or around 0.15%. . . just a little context
Yes but everytime this happens, which is probably every other day on average (and twice today alone) assets get misspriced. even if you assume a 50% correction when everything is back online, 1.5 points x 252 trading days a year / 2 (every other day) and you get 189 points of bullshit, right about 10% of current S&P.
Obviously this is back of the envelope, I dont know if it really is every other day. However I also know 1.5 is very modest compared to other days when theres more drammatic action during breaks. Not too mention the circlejerk algos respond to the instant 3 point rise by thinking theres momentum so they buy
and well my point is no matter what amount, it happens often enough that it will result it the market being priced incorrectly. Of course who gives a shit at this point anyway
15 more years of economic implosion and commodity price collapse is now apparantly bullish -