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Stock Market Self-Cannibalization To Continue As Volume Implosion Accelerates
The 'what we lose in margin, we'll make up for in volume' strategy is failing. And for the NYSE it is failing large. The decision to 'enable' HFT - for its 'liquidity-provision', which after all has done nothing but expose the dismal reality of a market structure designed to nickel-and-dime retail til the last penny drops, has had the absolute opposite unintended consequence of driving the only real liquidity provider - the retail trader putting his real money to work - out of the market. As Securities Technology reports, the NYSE Euronext reports daily volume of trading stocks down 16.9% from a year ago (and down 17.8% YTD compared to last year) and down 9.9% from June alone. Trading in stocks on its exchanges in Europe were also down 12.3%. This plunge in stock trading has knocked into the derivative markets which have seen a massive 15.8% cliff-dive worldwide from June to July.
One more nail statistic in the coffin of CNBC's audience is a 29.7% drop in ETF transactions year-over-year and NYSE/Arca/MKT's share of trading in NYSE-listed stocks is down 34.3% from a year ago as the dark pools rise.
With volumes collapsing it is only likely that we will see far more 'incidents' such as Knight - where companies whose top-line explicitly stems from flow trading - increasingly find themselves redundant; whether or not this is due to a self-inflicted algo, or other, potentially more sinister, reasons.
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we dont trade stocks here!! lol
Pass the Chianti please.
Its a Skynet, Hal & Joshua circle jerk - where fingers are replaced by digits!
...and the fava beans
The sheep will stay in their stocks, mutual funds and 401k's until the bitter end. It's what they were told to do.
a bunch of the boys were whooping it up, at the malamute saloon
up/down a dollar, every other hour, winning/losing while downing that blue ruin . . .
ALGO: @ the klondike kasino
0.01 x 10k/s x 100cos. = desperate pennies an hour, picked-off-the-bones of these
0.02 ?
49er-type goldcos as, a buncha bucks, along comes that croupier to wipe the table clean
oh my.
darling.
clementine
Shouldn't the title read: HFT Cannibalization To Continue As Volume Implosion Accelerates since retail has left the building?
I think at some point when the machines start fighting over the 10 remaining orders in the system, there will be more problems exposed.
I am still waiting for the HFT machines to battle it out. Maybe something like this.
http://www.youtube.com/watch?v=DpYE8FtWXhA&feature=fvwrel
I suspect that when the market drops over the cliff volume will return if only for a bit. If your a buy and hold type why would you trade when the robots are pumping things for you. If you're an active retail trader you're just a myth anyway so we don't care what you hypothetically would do.
Remember Jeffries everyone, I bet they are next on the block and it won't be pretty. The bankers and the US want out of this mess without pain and it's not possible. The spider has spun a web so complicated that even he is caught in it.
Bernanke says, "Pay no attention to that man behind the curtain!"
He is the man behind the curtain.
Algos have ruined the market and everyone knows it. Even those who don't smell a rat at this point.
Still time to get short here for those crazy enough to still be involved. Bernanke's options are not nearly as robust as many interested people would like to believe. In fact, what little is left of the Fed's credibility is at high risk right now.
He is the man behind the curtain.
Right, but it was that man behind the curtain who said "pay no ateention to the man behind".....
bernanke is NOT the man behind the curtian. HE is the wicked warlock of the East. The men behing the curtian are operating by cell phone from one of their 150 palaces spread across the world.
Pay no attention to that man behind the curtain!
pay no attention to the fat cats living in the 151 palaces spread across the globe
..and that short chubby balding little oik with a beard too
Agreed - he is a dirty old man and he is naked
Bond Market, Bond Market, Bond Market!!!! Thunder Cats Hoooooo!!!!
http://govttrader.blogspot.com/
You're going to wear out your welcome real quick-like if you keep spamming every thread. Especially if you aren't adding anything to the discussion.
Just sayin'.
FWIW, govttrader's call on the bond auction price action today was spot on...so thank you, govttrader...
He's a bottom-feeder; in this case, he's bottom-feeding off ZH's traffic.
Must be busy in the Hampsteins...
Again, another important point that no one talks about on CNBC as they're all busy calling for SPX 1600 by EOY. It's really going to hurt these guys - no trading, no revenue. Scary situation when these guys start to come up with "creative" ways to make up the difference. Knight will look tame at that point.
I don't know , man..
I'm getting the feeling that the digital printing press has been displaced by the replicator that has no need for digital book entries.
Don't worry about low volume. There is not enough supply. Stocks are sold out.
Well it's 3:35 ET and the NYSE volume has finally surpassed the volume from the 1:00PM close of July 3rd..way to go NYSE...
CNBS is pure propaganda. It's the real Muppet Show.
That would be a great skit - if someone could overlay the Muppet Show theme music over CNBC's Cramer!
http://www.youtube.com/watch?v=UlXMboPnETU
LOL, Becky can put her arm up his ass make him scream BOOYA!
Screaming BOOYA implies Cramer would feel Becky's arm!
If it were not for reporting data, cnbs would have NO viewers!
Tell me when the 'I Love Lucy' reruns begin
Already called this one 4 days ago.
2681280
"Yes, this was a setup. Not being talked about is the fact that KCG had $7.5B in cash as of their last quarterly statement in June 2012. They could have handled the loss. This was engineered to remove competition and control an avenue of the markets. Interactive Brokers needs to take caution (IBKR)."
2679907
"Watching them cannibalize each other should be interesting over the next few years."
the lower the volume the higher the stock market
Yeah! ... It is called a Hammerhead Stall and we all know what happens when gravity becomes stronger than lift.
you fall into the shark-infested waters for lunch?
i think the sharks like bear a'la fresca; thery've been having it for lunch all week...
whenever angela strolls back onto the bourse we'll get a bit more drama, but the banksters will take every point they get on the indices b4 that fateful day
what is angela thinking?
slewie intel indicates some pretty subtle indications to figure, here
and check this out: SPIEGEL ONLINE Poll Barometer - SPIEGEL ONLINE where we see:
why?
Self-Cannibalization? ... Those last few bites are going to be a real bitch to accomplish.
One share to bid them all, One share to find them,
One share to short them all and in the darkness bind them
I hear it tastes like chicken.
It would be interesting to identify whether there were any "stand-out" parties involved in buying everything the Knight Algo was selling. When you think about it, it would be the perfect crime in today’s uber-complex market, i.e. some algo conveniently goes berserk, and another algo in another location conveniently buys everything it sells...then the company files for bankruptcy, several hundred million go missing with no one looking for it, and no one is prosecuted because it was an “accident”.
Well GS actually did say their algo could be used to manipulate the market in unfair ways if stolen.
All algos are equal, but some are more equal than others.
pods
unfair in their case meant - someone else doing it.
I agree. Maybe it was no accident. Maybe they were using Whack a mole algo to destroy KCG for someone's profit. Talk about corporate espionage reaching new levels. Who wrote the algo program? What prompted it to cannibalize KCG? I would love to get full post-mortem.
The market seems to have broken at 2:30. I guess the Algo goal was to end the day unchanged.
The Dow had a nice triple top to almost the exact same price, and then fell 70 points, made the 70 points back and started going directionless for the next hour.
What algo driven madness will we find this time.
I have $7K left in the market out of my $850K cash net worth. Haven't traded a stock in 14 months. Never felt better, couldn't care less what assholes like Cramer, Pisani, and the enumerous jackoffs paraded on TV have to say. I cashed in some 401K money early and paid a penalty 2 years ago to buy more metals. Fuck You Ben Bernanke
Nice did they 1099 you on the gold?
What Gold?
Stock Market Reverse Singularity: 1 Share of stock left, and BenB can mint 1 $10 Trillion Platinum Dollar Coin to buy it with.
Cashed in half of IRA last year and will finish this year before taxes go up. Cash is in 6 different banks, spread it around, don't go over that 250k mark and watch they don't lower it back to 100k. Look for small solid banks. If in NY area, Take a look at Ridgewood Savings on Bank Rate.
http://www.bankrate.com/rates/safe-sound/bank-ratings.aspx?t=cb&i=ridgewood+savings&r=&a=&c=&s=&z=
Click on MEMO and STATEMENT to see the figures. I have dough in 4 of the big banks and a credit union. Largest deposit in Ridgewood.
Have you considered converting some 401K money to a Roth-IRA?
Depending on your other income, some or all of the taxes would be consumed by your deductibles.
I use last year's turbo-tax to estimate the cost of a partial conversion in this year.
That money can then be steered towards additional tax free income!
Must. Close. Above. 1400.
It's there, on schedule.
After being in the business so long it's almost surreal watching the system slowly kill itself off.
HFT solution is simple, it is CAPTCHA
add captcha for every order entered .. and the volume will be back
One Printer to rule them all,
One Printer to confuse them
One Printer to bankrupt them all
and in poverty bind them.
Well I guess we better hurry up and give Social Security to Wall Street and initiate forced employer stock purchases as well.
Lord.....just fucking crash already.
Yesterday Bubblevision had a "story" about how SPY1400 "was the most hated rally on Wall Street" Hmm. While i have little time to spend everyday reading how CNBS urinates down its leg daily i could only guess. The real story was some "bull" standing all cocky (maybe it was robo?) telling all to just run with it , that anyone so negative "must be reading too much zerohedge". I kid you not. Whats so bothersome to me is IQs of 2 cant understand. Its not the algos in my world. The rally is hated because anyone with a brain knows its fake,fraudulent and on mom and pops dime. Its really just more Wall Street bailouts at the expense of the rest. I just cant understand whats so difficult to understand about that??!!
Mucho hi-quality stock tied up in long accounts, earning divvies. They won't know what hit them.
Wonders if retail sell orders will get drowned out by the algo sells when the journey over the cliff begins....
Algo sells are first in line. They'll unload like Knight, in milliseconds while you are still trying to log into Charles Schwab or TDA like me.
Let's see fundamentals don't matter. Earnings don't matter. Outlook doesn't matter. Cash on hand doesn't matter. Sector outlook doesn't matter. Recession doesn't matter.
It's clear there is no spoon.
Why doubt that doing a triple on the money supply will do a triple on the stock market? I was a hyper nflationist when they started the printing. I still am. I am telling you, YOU CANNOT HAVE A BANKING PANIC IF THE BANKS GET FREE MONEY. Selloffs don't happen because of fundamentals. They happen because of the macro environment. Our macro-envirment is continued free money to banks at zero percent and lies about secret bailouts. No banking panic, no selloff.
I hate to sound like Robo. But he is right about exactly one thing. This stock market is bullish until the Fed DECIDES to kill the banks. The Treasury market is bullish until the Fed DECIDES to stop propping it up.
I don't like it. I know it ends up in inflation. If you want out, the absolute only thing you can do is buy gold. That is it. We don't have a market. We have central planning and printing until hyper-inflation resets this mess.
LOL, how in the fuke can you call the last 12 years in the equity market "BULLISH"? Granted, being short equities during most of that time would have ruined you due to margin fees, but being long during that entire time sure as hell wouldn't have been profitable if you had been proportionaly weighted in NASDAQ.
short but excellent post ZH
This market s being eaten alive from within.
Scary... they'd better pull the trigger on the MASS ARREST soon... http://tinyurl.com/cd5cyjo/
I stopped trading about a year ago due to the collusion of the stock market. Fun while it lasted. I got rid of my 401K in 2010. I only wish I had broken it out over several years rather then swallowing the tax pill all at once. Better to be a couple years early then 1 day late.