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This Is How The Algos Trade The Fed Announcement
With Treasury volatility spiking in "panic" mode but equity volatility in "everything will be fine" mode, there is plenty of room for the algos to go wild around this afternoon's decision. As Nanex shows, the last few years has seen lower and lower liquidity on Fed days as the pattern of liquidity collapse intraday provides just the ammunition for the instant buying-panic in the first 2 minutes after the decision.
Equity traders seem extremely complacent...
Which is bad news as liquidity has been tumbling on Fed days in recent years...
But there is only one pattern the algos know... Instantly buy! No Matter What!
But 1415ET-1430ET is the best cumulative performing period on Fed days...
Easy eh? Or will it be different this time... 7 years after ZIRP began?
Charts: Bloomberg and @NanexLLC
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If Raise Rates: Then Sell Gold
If Not Raise Rates: Then Sell Gold
They are going to print more money from thin air long before they raise interest rates. And they will still be dropping the price of PM's because they can.
If Es is not 1800 by 3:59 pm, then it will be 2080/2090 on the way to new all time highs.
Lol, a 200+ point drop... what, it's only 10% in one day.
like shooting gefiltefish in a barrell
I just can't react that fast these days...
They buy everything all at once, then they sell everything all at once. Rinse & repeat.
They are basically shaving pennies on their trades, but somebody has to buy and the herd is thinning fast. I expect that the algo's will eat themselves and each other in the end.......
I always suspected there's a fair amount of wash trades when the algos ramp things up.
Just BTFD...for two or three milliseconds.
the word is pragmatic, not complacent.
if you do not btfd then you are a fucking idiot
It's not a pyramid scheme you idiot, it's a buy the dip scheme you feel me?
Man I love that video.
I bet we have a 500 point roundtrip today..at least..and more tomorrow
Probably round-trip to 0 net change if they raise, and +500 Dow if they don't raise. Because if they don't raise today, it's like saying they will never raise.
... But this time is different...
/s/
on the SPX?
Oh I'm buying and selling, buying and selling, arbing some handles, got my Squawk on and my charts with my top secret forumlas(fibs in the basket). Yea Bitchez! Trading is cool!
+1 I totally agree. Hell no this market will not go down. The FEDERAL RESERVE will make sure of it. Must keep the illusion alive.
And short gold an silver futures, of course.
I don't think they will raise.
Even if they did — and they won't — 0.25% will hardly make a difference, since it's priced in (the street estimates what, 75%+ chance that they will raise?)
It will be like Japan. Even if they raised 0.25, they will have to drop rates back to 0 very soon thereafter.
So panic buy at 2:00 P.M. ET?
Got it!
Yes, whether they raise rates or not.
To raise or not to raise?
Except the question is academic.
The nominal rate of a defaulting debt is an academic exercise. And the disappearance of liquidity and crash in the velocity of money that happened in 2008 was the defaulting of the world-wide debt-based fiat ponzi scheme.
Due to size and the closing of all the escape hatches the default has simply been happening in slow motion. And it will continue in slow motion until we return to the dark ages, or until we reject the authorities' whose idiocy or perversity is the source of the problem.
The default is happening at ZIRP...and maybe an iota faster at 25bp.
But, really, the rest of the difference is psychological.
I will lick the sweat off the doves' balls at this press conference, and our trading desk will be shoveling your tax dollars into the market furnace. We are intent on destroying the dollar anyway, so what's the difference. Strap in, I'm gonna show you how great the e-con-o-me is.
Long - Ammo, Food, Whiskey, Gold, and Silver
Short - my fucking patience with this manipulated bullshit.
HANG THE FED !
It's actually quite astounding, even us crooks at the Fraudulent Reserve are amazed:
Here we cause repeated market crises, are given the power to make banks and financial institutions spend tens of millions of dollars to build systems to "stress test" their portfolios to model how much money they will lose when the next market crash comes, and the public sheeple hang on our every utterance as if we are gods!!
Only in Amerika could such a fantastical dream like this occur!
Yes. The powers that be are definitely going to let the market zoom today after the announcement. Obvious moves seldom happen.