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The Market Has Just Gone Nuts
Presented with little comment, aside to ask: "where are the liquidity-providers?"
Extremely heavy volume... and wild swings
Zoomed in the moves actually occurred over a 5 minute span... (via @NanexLLC )
And it appears all about algos playing The VIX ETFs... (though we already know that VIX manipulation runs the entire market)
420 Point roundtrip in The Dow in under 9 minutes...
As HYG hit Friday's lows...
And all of this is happening right on cue following JPMorgan's Marko Kolanovic warnings of "massive stop losses" ahead..
Not surprisingly, the biggest potential selloff catalyst is the Fed itself and specifically the Dec. 16 FOMC announcement, which the Fed is desperate to guide as being "priced in" by the market, but considering the Fed's track record with getting any forecast right, concerns are starting to grow. "As for near-term risks—we believe the most imminent market catalyst will be the December Fed meeting in which we are likely to see the first rate hike of the cycle."
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So far so good, but to a market which has traded mostly on technicals and program buying (and selling) in recent months, there is something far more troubling than just what the Fed will announce:
This important event falls at a peculiar time—less than 48 hours before the largest option expiry in many years. There are $1.1 trillion of S&P 500 options expiring on Friday morning. $670Bn of these are puts, of which $215Bn are struck relatively close below the market level, between 1900 and 2050. Clients are net long these puts and will likely hold onto them through the event and until expiry. At the time of the Fed announcement, these put options will essentially look like a massive stop loss order under the market.
What does this mean? Considering that the bulk of the puts have been layered by the program traders themselves, including CTA trend-followers, and since the vol surface of the market will be well-known to everyone in advance, there is a very high probability the implied "stop loss" level will be triggered, and the market could trade to a level equivalent to the strike price, somewhere in the 1,800 area, or nearly 200 points below current levels.
Which would be a tragedy for the Fed: after all, nothing is more important to Yellen, Draghi et al, than affirmative market signaling - pointing to the (surging) market's reaction and saying "look, we did the right thing", just as Draghi did on Friday when he explicitly talked the market higher in the aftermath of the ECB's disastrous announcement.
The irony will be if, regardless of what the Fed does, the subsequent move is driven not by the market's read through of monetary policy but by the "pin" in this massive $1.1 trillion option expiry, the biggest in many years, one which if recent market action is an indicator, suggests the stop loss strike level will be taken out in the process setting the "psychological" stage for market participants who will look at the drop in the market, and equate it with a vote of no confidence in what the Fed is doing, potentially forcing the Fed to backtrack in less than 2 days!
Whether this happens remains to be seen, and we are confident the Fed's "arm's length" market-moving JV partner, Citadel, is currently scrambling to prevent any imminent selloff. However, considering Kolanovic' track record of hinting at key risk inflection risk, it is quite likely that whatever the ultimate closing price on December 16 and, more importantly, December 18, volatility may very soon have an "August 24" type event.
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Something has broken.
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420?
Smells like skunk to me..
Something ??? (has broken)
LMAO
yellen and company's first attempt at some window dressing - FAIL
tune in tomorrow, same bat time, same bat channel
oopsie - fucking cunt got it right again - I wish yellen would just fucking die!!!
The "market" fits the nation perfectly, schizophrenic.
Presented with little comment, aside to ask: "where are the liquidity-providers?"
at a much lower level than current prices. hey, we're down here! i am prepared to wait until hell freezes over.
What does any of this have to do with investing? I grew up in a system where the Stock Market was everyone's chance to invest money into companies with potential for growth and good profit margines, while not overly leveraged. One's capital invetment in buying a stock gave the company capital to carry on it's growth, expansion, modernization or whatever. The success of that company was all that guaranteed a good return on that stock holding through dividends and perhaps even substantial share price increases. Every quarter my old man opened several letters from various companies he held shares in, going all the way back to the 1940's. Often there was a check inside, our dividend.
Fast forward a few generations. Read the entire article posted above, and tell me this has anything to do with investment and with compaines prospering in a capitalist marketplace.
It all sounds like walking into a bookies storefront in London, and haggeling over the odds on Manchester United going to the final round in the Champions League, or betting the sex of the next Royal Baby. Hardly anything to do with capitalism.
And every time the word "Market" is used, it is an obligation that the words "Federal Reserve" be used!
Do people really understand how far we have come from Market based capitalism? Where the laws of supply and demand set pricing. When was the last time a market trade happened without manipulation or the Fed being a driver on the trade? When was the last market action you took that was not "Front Run" by the big trading houses and banks. Who built servers right next to the market's servers, to gain that micro second's time to front run you?
The stock market is dead.
In it's place is an altar where sacrifices are made.
Options expiration week. Time to gun it!
Well, we're not just gonna let you walk out of here.
Who's we sucker?
Smith and Wesson... and me ... [/Dirty Harry]
no
really
what kind of an a-hole invented the word "capitalism"?
r
The HFT system makes money from each trade, a little at a time, front-running other trades. In order to get the most money out of the fake market, they need to have many trades. That means there must be swings in any direction just to add geography to the move. A straight line would be excellent price discovery- which they don't want.
Kind of like the death throws before someone dies?
Gasoline was bought to rescue the market. The market is fabricating Gasoline stories to try to pull up Crude. The story is dropped then the Fed buys, for size. Crude leads SPX, not the other way around.
High yield junk is too risky, better play it safe with stocks!
"where are the liquidity-providers?"
Trying to get off-planet! LOL
Looks to me like it wants DOWN and PPT keeps trying to goose it; it also looks like they are going to fail.
My personal 12 days of Christmas (in no particular order):
Just had this ugly mind visual.
Janet Yellen is the center on the Goldman Sucks football team. QB Blankfiend goes to an audible out of shotgun formation and goes directly behind center, sticks both hands between Yellen's thighs and shouts out, ZIRP, NIRP, Zero-Point-25 HIKE!
Yellen doesn't budge. The entire GS offensive line (and I do mean really offensive) false starts, yellow flags fly everywhere. Blankfiend's hands are still stuck between Yellen's thighs and both of them are smiling!
Hike, Janet, HIKE, you DUMB-ASS BITCH!
(Sorry, couldn't keep that one to myself.)
Forgot the part where she crapped 'em.
Has the FED been given the Order
by the B for IS to hike rates?
We shall soon know whether they want controlled demolition or outright Nuclear Devastation.
Judging by the calls for Weapons Confiscation in the US, the last country to hold Rights, I would guess it is Demolition and round-up of "persons of interest."
If the Banks close or there is a Disruption, any Patriot should clear his property for a secondary location.
There was a lot more to "Jade Helm" than advertised; it was essentially the pre-positioniong of equipment to aid in Universal Disarmament.
Those of you who live in an analog world do not understand the grasp of the modern fascist state. However, the "modern fascist State does not understand the desire for Freedom.
So, we are going to have a big giant civil war.
The Bath House Regime will call in all markers; UN reps will attempt to disarm citizens if you are at home, so do not be there.
NOW, the True Purpose of the Indonesian Bath House Regime is Revealed: Disarm the US at the point of Jade Helm/UN support.
Have we always had Psychos who wanted to control The State?
Yes.
But, we had a means of Law to control them in years past.
They have jumped that boundary.
They are coming for You. You can choose to fight or die or be a slave.
Good Luck.
High speed wobbles!
I read that the wobbles were caused by global warming and the melting of the glaciers.
Hey, look at that. the markets are green.
Balance sheets and geopolitics mean nothing anymore. Rainbows and sunshine ahead!
How come I get the feeling this market is being "held together" with baling wire, 550 chord and bubble gum??
Right. A 500/1000 point drop from here would not be a surprise. Let's see how the foreign markets do overnight. Tomorrow could be a big day. I'm flat. Just an observer at this point.
the real problem with that scenario is the difficulty finding any decent bubble gum these days.
Is it VIX smashing and clubbing that is being used to goose the makets today? Sure looks like it!
Russia Warns That Donald Trump Is A Target For Assassination
The report of the Russian Foreign Intelligence indicates that there is an active plot to assassinate a presidential candidate Donald Trump, due to the fact that it represents a serious threat to the status quo of the American ruling elite. Five Saudi Arabian nationals were detained by the security services of Lebanon in their a private plane. When they found a laptop. The notebook was found top-secret routes of movement and security plans of Donald Trump. Rick Wilson in an interview with Chris Hayes last week, in fact, called for the assassination of Trump. "Trump - this is a very powerful force now, because it appeals to the part of the Conservative Party. The elite can not just sit idly by and say, "Well, okay, do not worry, that everything will resolve." They still have to go out and put a bullet in the Donald Trump "- said Wilson. So what does that mean? It means that there is an active movement in the Republican Party and the White House to implement the plan to eliminate Donald Trump. This means that two These groups have rallied in this conspiracy. Trump is unique, he was telling the truth at every opportunity, and no doubt he feared the higher officials. Donald Trump is campaigning as the people's voice, his words directed against despots and no doubt they want him to leave.
No doubt Langley/Mossad/Saudi Intel, etc., would be behind it.
Sorcha Faal
Sorcha Faal is the alleged author of an ongoing series of "reports" published at WhatDoesItMean.com, whose work is of such quality that even other conspiracy nutters don't think much of it. There is a high chance that "Sorcha Faal" is actually David Booth, the owner/operator of the website, or someone collaborating with him.
Each report resembles a news story in its style, but usually includes a sensational headline barely related to reality (e.g. "American Rebel Forces Attack Gas Pipelines, Explode Trains As US Civil War Nears"and quotes authoritative high-level Russian sources (such as the Russian Federal Security Service in the same article) to support its most outrageous claims. Except for the stuff attributed to unverifiable sources, the reports don't contain much original material. They are usually based on various news items from the mainstream media and/or whatever the clogosphere is currently hyperventilating about, with each item shoehorned into the conspiracy narrative the report is trying to establish. Cited sources range from the mainstream media and Wikipedia to Infowars and Richard Hoagland. The author also has the habit of adding unnecessary links to the websites of the various Russian institutions they mention.
Sorcha Faal reports sometimes appear on conspiracy forums such as Above Top Secret and Godlike Productions, often after being republished by other websites (such as the European Union Times). Invariably, the following amusing pattern emerges: it usually takes only a few posts before the forumites identify the source and the author and start piling verbal abuse on the idiot reposting such bullshit and on Sorcha Faal herself, often twisting the name into "such a fail" or some variant thereof. The bad news is that this doesn't stop other forum-dwellers from believing it.
Just your typical liquidity-less flashy crashy market
It took them all day, but all three climaxed at the end of the day!
To my mind there's no real market anymore. It's so manipulated by the Fed, the banks and hedge funds that conventional indicators are of limited value.
J.P. Morgan analysts wrote that the three best leading indicators for recession have been credit spreads, the shape of the yield curve and profit margins.
Here are some signs of a coming recession.
1. Investors in high-yield bonds are expecting to see their first negative return since the start of the credit crisis in 2008.
http://www.marketwatch.com/story/deteriorating-junk-bonds-flash-warning-signs-for-stocks-2015-12-07?dist=afterbell
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Iron ore prices tumble
http://www.marketwatch.com/story/iron-ore-prices-keep-crashing-adding-to-global-growth-fears-2015-11-30
6. Baltic dry shipping index tumbles
http://www.marketwatch.com/story/shipping-index-falls-to-all-time-low-stoking-fears-about-global-growth-2015-11-19
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
Take your mind off this nonsense momentarily! Watch a cartoon.
http://freecartoon.org/howls-moving-castle-2004-online-full-movie/
Howl's Moving Castle
Just a lesson to the CRIMINALS, this is what happens when you paint yourselves into the corner!
this could get real messy