The Whack-A-Mole Algo Is Back

Tyler Durden's picture

Because as we showed today on not one but two occasions, humans no longer trade the casino formerly known as the 'stock market', we were glad to see that our old friend - the Whack-A-Mole algo - is back. As the following animated chart from Nanex shows, the algorithm is one which merely cycles in a broad, 10%+ sawtooth pattern blasting out empty quotes to feel the market in a test of other algos' responsiveness, and during a period of 6000 quote blasts, executes just under 20 actual trades. We will launch a catalog of all the various algos as we see them. After all, now that nobody else is left, it makes sense to at least make the acquaintance of all those robotic parasites that are the only entities left quote stuffing each other to death all the while, in true Knightian fashion, levitate the general market higher.


And as a special bonus, here is a reminder of what happened during the "BATS crash." From IPO to death in 750 milliseconds.

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Dapper Dan's picture

The untouchables, starrring Loyd Blankcheckfiend

Reuters tweeted:

FLASH: No criminal charges against Goldman Sachs or employees for subprime deal: Justice Department
The Monkey's picture

We are mostly bears here, not bulls (at current prices).  For this reason, I don't see why we would complain about whack-a-mole.  Also, I'm coming to appreciate the Fed / central banks - although not for the reasons they intended.

I feel for the bulls.  It was fun.

The Monkey's picture

When ZeroHedge readership is down bigtime and bond spreads are narrow AND

the market is close to it's cyclical top AND

there are a lot of bulls AND

the bears have been wiped out...

THEN it's time to short with conviction.

AldousHuxley's picture

BATS that's some funny shit.

redpill's picture

Someone, right now, is writing an algo to take advantage of this algo.  Then someone will write an algo to take advantage of that algo.  At some point, if we haven't already reached it, this circus will become so absurd that humans will be chased out of the market entirely.

short-swap's picture

I just keep coming back for the fancy charts with the pretty colors. Now if I could just find some of that stuff James Holmes is on....

Dr. Engali's picture

We are getting there. Have you noticed to the lack of commentary on each post? And the article view count is down. I'd say based on the lower numbers more and more bears are throwing in the towel.

The Monkey's picture

Weird metric but yes, I agree.  Shilling, who is my favorite strategist, is still calling for an eventual P/E of 10 (and I agree).  This froth market is reminiscent of Japan - not sustainable at all.

Bulls are fucked.  They may get another 1-2% out of this market, but no more.

Game over.

Dr. Engali's picture

I think we will hit a single digit PE. I'm looking for a 6 or 7. Then I'll buy hand over fist.

Stay liquid my friend.

The Monkey's picture

Maybe.  I would say you're safe in cash or treasuries.  Nothing else unless you want to take a 40%+ bath.


Stoploss's picture

Pretty little exchange..

Are you two going to drop trou now and start sucking each others cocks??


Dr. Engali's picture

I'll leave that up to you. It's seems to be on the forefront of your mind. You could probably catch up with somebody from the SEC and watch some midget tranny porn together just to heat things up.

The Monkey's picture

You better tighen up that stoploss asshole. Else you be sweeping floors when your 80.

Landrew's picture

I don't think the typical person here is either bull or bear we tend to be logical and make money what ever and when ever there is a greater chance of profit. There is always something to buy and something to sell. I think that kind of single minded thinking locks out any chance for profits because very few people have enough money to be right if you catch the drift.

The Monkey's picture

Yeah.  Well put.

I like throwing a bearish comment out there now, at the top, because I would like to see the bulls come after me at this point.  Squeeze that last drops of lower entry price for the bears out of the equation.

Bulls are doomed at these prices.  Come and get us.

EscapeKey's picture

There's a shock.

Does the article mention whether Goldman Sachs will countersue for slander, or just take the cash straight out of the treasury to make up for it?

RockyRacoon's picture

They will slit their own throats because a lot more of this type of action will beg for a transaction tax.   Yeah, the dreaded "T" word.   Anathema to capitalists everywhere, but is there another way to curb the enthusiasm of trading algos?  Oh!  I know.  Some more/new regulations!  Yeah, that's the ticket.  More stuff to ignore, just like the stuff being ignored now.   Oh, the humanity!   Stop me before I kill again....

nmewn's picture

"...but is there another way to curb the enthusiasm of trading algos?"

Maybe we could put actual people back on the floor trading?

Not that I'm big on common stocks, which are essentially worthless in my view...but they seem to mean something to a lot of people.

EscapeKey's picture

Hey what happened to your extra 'c'?


holdbuysell's picture

Shouldn't the SEC be looking into this kind of....never mind.

EscapeKey's picture

They are currently looking into the Pornhub "buffering" issue.

Everyman's picture

Forget the SEC.  We need to "interrupt the signals" during key times of the day, or take nodes out entirely.  This system is vulnerable, and I bet most of the techs have NO clue what they are "taking care of".  These are almost ALL microwave emitters.


Take out a tower or two, or have some mircowave scramblers.

We CAN take down skynet, even if the government canot or will not!!!


Here is the map of the lines:



bigwavedave's picture

Magnets. Big fuck-off sized magnets. And a pick-up truck. 

Everyman's picture

I was thinking of a barrett .50 and aim for the microwave emitters!!!!

chump666's picture

'cannibalization to capitulation'

HFTs gift to the market.

Xibalba's picture

We like to call that one the 'Gensler' 

Meesohaawnee's picture

if your the SEC you see peter north's big limp dick in your face on that graph

DaddyO's picture


Bawny, Bawny is that you?


emersonreturn's picture

good on ya, tylers!

Meesohaawnee's picture

but but the jeff macke clownshow said shorts are "whiners"

printmoremoney's picture

Those are perty pictures. I guess you have to really be quick and good now to be a market timer. Sharpen you pencils people.

And then stick them up your arse.

Stack real money. Electrons are not real. They are a mental game.

Zola's picture

what i dont understand is the Chinese. Especially last august/sept when gold came under attack on the day of the swiss franc devaluation and the general action in gold since. Why not just simply overwhelm the manipulators in the paper market ? Just start selling the treasuries and buying gold for delivery on the exchange. If PPT/USSA/FED/ESF... really want to dump a huge amount of paper gold, then convert a lot of your holdings and then pull the plug = game over ? Could be the issue with delivery (MFG etc...) . Quid of the the supposed chinese futures exchange ?

Antifaschistische's picture

my take Zola...because that's WAR, and the Chinese aren't there yet.  They don't need to play that card at this time.  The important thing, is that they have that card in their hand and they don't give it up.

you enjoy myself's picture

at what point is quote stuffing going to actually be banned?  this is the easiest thing in the world to clean up, and affects no one that's a legitimate market participant.  there might be some prosecutorial discretion called into play, but only after the HFT's adjust to the new enforcement threshold of what quote/cancel ratio draws scrutiny.  but if you're stuffing 6000 quotes and only executing 20 actual trades there's not even a question about your intent.  its complete insanity that there's a legal trading strategy dependant upon overwhelming the bandwidth and processing power of the NBBO. 

cougar_w's picture

It's not just a legal trading strategy. It's how TPTB are manipulating markets upwards. And therefore it's how they are managing perceptions regarding the health of the economy.

Absolutely everything is at stake here. HFT is the magic elixir that will get them through. The smaller the market volumns, the better this works. They can churn the same million or so trades a million times, and take prices just about anywhere they want to.

But it is all disinformation and propaganda. It ceased being a market place years ago. This will not change until the entire economy collapses and things have a chance to start over.

Meesohaawnee's picture

awesome!! well done.! and how did they reach vapor volume?? they spent the last year terrifying every last short on the planet. stealth short ban i call it. indeed very calculated.

rdkyote's picture

This is such bullshit, I can't even stand it anymore.

Bear's picture

I've been watching for hours and and still not bored ... by life is now aglo with possibilities

stocktivity's picture

I've been saying that for months...It's all Bullshit!  JP Morgan and the boys are able to go a whole quarter without a single losing day of trading. A whole quarter of a year!

nmewn's picture

Zee mark of Robo!

Dr. Engali's picture

I have a vision of the near future where the market doesn't move but a point here or there. Kind of like the mid day cycle , and robots will be skimming while the S&P is permanently at 1400.

you enjoy myself's picture

i track a bunch of small and mid-cap miners and its been like that for a while, from the perspective of a human staring at level II.  there's virtually no movement on the surface, despite god knows how many sub-penny millisecond trades going on underneath.  i sold a small position today where i put a limit order in at the ask - it took nearly 4 hours for it to clear, despite the price bouncing only between the 1 cent spread all day.

Dr. Engali's picture

When liquidity dries up and clearing takes that long it tells me we are close to a system collapse.

Zero Govt's picture

i'm sure these algos are based on Microshite platforms're just asking for trouble aren't you?!!

Meesohaawnee's picture

totally agree. sometimes i have to walk away. I dont mind it so much. For me its a hobby/source of income/fun challenge. Not really too much about the money since i have a "normal" if you will, day job. Its a supplement basically but what bothers me so damn much like a poster said yesterday. The tipping point is knowing im being lied to and conned by other sources everyday. How these people in the MSM wake up everyday and live with themselves is beyone me. I guess thats why i luv the ridicule. Why the best read in the world was Tylers, (CNBC lowest viewership in 7 years blog) That made my week!! Its just not in my DNA to be able to wake up everyday and know people are loosing so much for what i say in front of a TV. Its just unbelievable to me.I guess im the crazy one. I dont know what i would do without the tylers and all the great posters here. We poke fun but i learn so much from you all. And have a  laugh to!

willien1derland's picture

If you play Pink Floyd's 'Dark Side of the Moon' when the animated graph starts you can see Geithner & Bernacke receiving "contributions" from K Street lobbyists...

toomanyfakeconservatives's picture

Laugh while you can... it's gonna be like The Day The Earth Stood Still when the MASS ARRESTS occur and hundreds of top traitors are paraded in front of the cameras...