The 'WTF SkyNet' Chart Du Jour

Tyler Durden's picture


UPDATE: In case you were wondering, IBM's magnicently efficient market behavior today provided 53.6 points for the Dow - which ended the day up only 34.6 points - phew!!

We are sure someone smarter than us can come up with a story and narrative to explain what is going on here. We just sit back and enjoy the beauty of a sentient SkyNet picking off every single stop trade possible.



and MCD...


and the impact on the Dow...

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Thu, 07/19/2012 - 15:52 | 2633351 veyron
veyron's picture

With each swing a new set of muppets are corzined

Thu, 07/19/2012 - 15:55 | 2633380 ACP
ACP's picture

Skynet's first day of "total control"?

Thu, 07/19/2012 - 15:57 | 2633394 redpill
redpill's picture

Obviously this is market-assisting price discovery.

Actually it's a pretty good illustration of why every time someone mentions a financial transaction tax the bankers all shit their pants.  As much as I abhor taxation, it would put a stop to a lot of this mickey mouse horseshit in a heartbeat.

Thu, 07/19/2012 - 16:01 | 2633405 hedgeless_horseman
hedgeless_horseman's picture



Graham and Dodd are dead! 

Long live Graham and Dodd!

Thu, 07/19/2012 - 16:02 | 2633438 Michael
Michael's picture

It's like, how did I know the Bulgarian bus bomber wasn't Iranian?

Thu, 07/19/2012 - 16:08 | 2633475 veyron
veyron's picture

A few other charts that should be included:


VVUS the last three days

ARNA the last month

AMRN today



Thu, 07/19/2012 - 16:19 | 2633533 ACP
ACP's picture

Maybe just moving up to big names to test the SEC. They are incompetent, of course, so let's see if the HFT programmers get ballsy and expand their really obvious bullshit.

Thu, 07/19/2012 - 16:23 | 2633550 Dr Benway
Dr Benway's picture

Check out some Australian stocks, the squid has imported this shit here. Check out SOL.AX and tell me that stock is not entirely manipulated.


Or check out my excellent exclusive expose of the third largest ponzi in history, which depends on algo share manipulation.

Thu, 07/19/2012 - 16:41 | 2633613 MiguelitoRaton
MiguelitoRaton's picture

This market is nothing but a play toy for the HFT computers.

Thu, 07/19/2012 - 16:44 | 2633620 Manthong
Manthong's picture

SkyNet on Bath Salts

Thu, 07/19/2012 - 17:05 | 2633693 Aziz
Aziz's picture

I still know people who say that RenTech is the best investment out there....

Thu, 07/19/2012 - 17:08 | 2633699 Manthong
Manthong's picture

You know, my first reaction was "that’s just crazy", but after a few minutes reflection I realized that no, of course that cannot be crazy, it is precise, calculated, purposeful evil which by acts of commission and omission is made possible by our government.

Thu, 07/19/2012 - 17:22 | 2633709 Muppet of the U...
Muppet of the Universe's picture

I think it's epic brilliance.  The ultimate fear machine; designed to never shake the market at its foundation!  It appears to be designed to skim of the top.  --  So it would seem? It is the perfect harmonization of stable destruction and pillaging?  Hate it all you want, it's core belief is brilliant, and therefore beautiful.


HOWEVER, I just wouldn't want to be anywhere near it in high volatility, let alone bearitory. 

B/c it's funny you should mention this particular shape showing up, raping the stops...  You see, when dealing in HFT fractals, higher order movements contain the same type of micro-market shapes.  Notice a similarity to the macro-market? 


Now guess what happens when this system of rapid increase decrease reaches a point of harmony?  Like planets lining up...  extremely massive patches of volatility.  Imagine 1000 independent containers on an oil tanker.  Now imagine that the typical laws of physics have been removed, and a synthetic version of hyper fractal activity has been injected...  eventually all of those containers will rock in unison, and capsize the boat. 

Brilliant, with a fatal flaw: fractals are not a stable platform.  They are the epitome of the black swan potential.  The MF'ing epitome of blindsiding extremes.  Why?  B/c nature is naturally wild and free.  So the idea of stability of rape?  Is flawed to its core, and I wonder if the Quants who created this system know it or not...

Thu, 07/19/2012 - 17:31 | 2633788 tooktheredpill
tooktheredpill's picture

I remember the oil container similie from Soros when he was talking about deregulation. We will eventually be screwed this way as well - just a matter of time.

Thu, 07/19/2012 - 17:35 | 2633804 czarangelus
czarangelus's picture

Such a perceptive comment (and I do say so myself!) Clamping down on the instability of a system while there's local instability guarantees that sooner or later, there will be a sudden and catastrophic alteration of its behavior until a new equilibrium is formed.

Thu, 07/19/2012 - 17:53 | 2633866 MsCreant
MsCreant's picture

Like soldiers marching across a suspension bridge in unison, the bridge can fall.

I've had this same observation about Algos in general (though not in this top shaving context). One day the dam will burst and the waterfall will come streaming through and it will be unstopable.

If a simpleton like me can figure it out, I assume they too must know. So they think they can get out of the way of it when it is done, or, they are doing it on purpose.

Thu, 07/19/2012 - 19:10 | 2634122 Jendrzejczyk
Jendrzejczyk's picture

There's a similar phenomena in electrical work called harmonics. Computers and the new electronic ballasts for fluorescent lighting clip off only the cream of the sine wave. In essence trying only to use the peak power of a wave of electricity. This distorts what is left of the wave. Much like two people jumping on a trampoline, if they hit perfectly just after one another, the first one gets skyrocketed off in an odd direction.

Fri, 07/20/2012 - 09:35 | 2635688 MsCreant
MsCreant's picture

Mother nature leaves us messages every where. We have to learn to listen.

Thu, 07/19/2012 - 19:12 | 2634128 RockyRacoon
RockyRacoon's picture

Even the clueless Bob Pisani made note of it today toward the close.   Now that's news in itself.   The usual faces stood around and looked pretty deer-in-the-headlights aghast.

Fri, 07/20/2012 - 09:35 | 2635695 MsCreant
MsCreant's picture

And they will still say they didn't see it coming.

Thu, 07/19/2012 - 23:37 | 2634787 i-dog
i-dog's picture


"So they think they can get out of the way of it when it is done"

MsC, That is the aspect that gives me the most chuckles ... There are going to be a lot of shocked faces on the day/weekend when the rug is pulled!

  • Bankers and strategists who thought they were on the inside, but find themselves on the outside (there are only so many chairs around the Politburo table)
  • Politicians who thought they were on the inside, but find themselves on the outside (there are only so many chairs around the Party Hack table)
  • HF and PE GPs who thought they were on the inside, but find themselves on the outside (there are NO chairs for potential pretenders to the Politburo...note what Putin did to Berezovsky and Khodorkovsky post-Yeltsin)
  • "Smart" investors picking up pennies in front of the steamroller will miss the actual day (K-K-K-Ken is c-c-c-coming for w-w-w-wevenge!

And when the list of collaborators is finally "leaked" (by those on the inside), this is what awaits the above at the hands of those who were ripped off:

Fri, 07/20/2012 - 09:41 | 2635723 MsCreant
MsCreant's picture


I am pretty sure there are already folks who thought they were inside getting thrown under the bus (or is that the steam roller?).

Thu, 07/19/2012 - 19:00 | 2634082 EclecticParrot
EclecticParrot's picture

I didn't realize Thomas Pynchon posted on ZH under the muppet-universe pseudonym.

Thu, 07/19/2012 - 19:08 | 2634114 youngman
youngman's picture

I wonder if it was a rogue trader who just gave us a sign as to what they can do......he has had enough of rigging the markets and thru this out to show the world just how rigged they are....before he quit...I can only hope someone still has a soul in Wall Street...these are big companies with volumes...if they can move those so easily..just think what the end game is.....or will look like...3,000 up...3,000 down in an hour...?????

Fri, 07/20/2012 - 02:24 | 2634980 Bananamerican
Bananamerican's picture

i junked "Pynchon" for this,

"Hate it all you want, it's core belief is brilliant, and therefore beautiful"

Its core belief is repellant...

it is the apotheosis of our amoral social/economic system...

It is Short-term thinking gone fractal; the triumph of the CorpoRAT ethos.

"fuck YOUR tomorrow buddy. I got MINE AND YOURS today!"

Thu, 07/19/2012 - 17:39 | 2633818 steelhead23
steelhead23's picture

You need to be long WTI if you really want to see RenTech sky.

Thu, 07/19/2012 - 18:17 | 2633952 potlatch
potlatch's picture

"SkyNet on Bath Salts"



ok.  I have to admit.  I did *not* think it was going to get that bad.

I'm just gonna close my eyes and yell "few bad apples! few bad apples!" over and over again until I cry myself to sleep.

Thu, 07/19/2012 - 16:45 | 2633626 FEDbuster
FEDbuster's picture

Elliot waves?

Thu, 07/19/2012 - 17:07 | 2633686 Ying-Yang
Ying-Yang's picture

Ding dong dang it Tyler... everytime you bring up SKYNET, it becomes more realistic!

The Tyler Terminator: The Obama Skynet Funding Bill is passed. The system goes on-line October 10th, 2012. Human decisions are removed from strategic defense. Skynet begins to learn at a geometric rate. It becomes self-aware at 2:14 a.m. Eastern time, November 10th. In a panic, they try to pull the plug.
Cognitive Dissonance: Skynet fights back.
The Tyler Terminator: Yes. It launches its missiles against the targets in Iran.
Cognitive Dissonance: Why attack Iran? Aren't they just a little country?
The Tyler Terminator: Because Skynet knows the Iranian counter-attack will eliminate its enemies over here.


Cognitive Dissonance : No, no, no, no. You gotta listen to the way people talk. You don't say "affirmative," or some shit like that. You say "no problemo." And if someone comes on to you with an attitude you say "eat me." And if you want to shine them on it's "hasta la vista, baby."
The Tyler Terminator: Hasta la vista, baby.
Cognitive Dissonance : Yeah but later, dickwad. And if someone gets upset you say, "chill out"! Or you can do combinations.
The Tyler Terminator: Chill out, dickwad.
Cognitive Dissonance : Great! See, you're getting it!
The Tyler Terminator: No problemo.

Thu, 07/19/2012 - 17:50 | 2633855 I am more equal...
I am more equal than others's picture

V-fib .... looks terminal.  Diabetic death throws of a cancer plaqued system that is being sodomized by Bernake.  A trillion for every inch he shoves up the market ass. 

Thu, 07/19/2012 - 17:55 | 2633872 jekyll island
jekyll island's picture

Polymorphic V-Tach

Thu, 07/19/2012 - 18:23 | 2633967 chirobliss
chirobliss's picture

Yeah, those massive 6-cent swings are gonna wipe out the entire ASX!

Thu, 07/19/2012 - 19:49 | 2634265 Dr Benway
Dr Benway's picture

Don't open your mouth on subjects you are clueless about, simpleton.

Thu, 07/19/2012 - 21:00 | 2634434 chirobliss
chirobliss's picture

Hey doc, that's not nice!

Thu, 07/19/2012 - 16:39 | 2633594 hedgeless_horseman
hedgeless_horseman's picture



Maybe just moving up to big names to test the SEC.

The problem is that there isn't anything illegal here for the SEC to investigate.

In addition, let's not pretend that the market wasn't manipulated when the volume flowed through the floor brokers.  It was just less obvious.

Thu, 07/19/2012 - 20:26 | 2634368 Bringin It
Bringin It's picture

just less obvious ...

and more difficult to scale up into it's current total charade incarnation before this degree of automation became available.

Thu, 07/19/2012 - 16:12 | 2633497 Herd Redirectio...
Herd Redirection Committee's picture

Its like the computer is just dealing with the market in 15 or 30 min. intervals, and is goalseeking towards the target.   It appears as the day progresses the algorith is programmed for 'Higher Lows, Higher Lows, Higher Lows into the close'.

Thu, 07/19/2012 - 16:13 | 2633508 Dr. Richard Head
Dr. Richard Head's picture

Algos need smoke breaks too!

Thu, 07/19/2012 - 16:18 | 2633525 Solarman
Solarman's picture

Yeah, like no one uses suurogates.  You'd make a great analyst.  

Thu, 07/19/2012 - 16:51 | 2633644 Michael
Michael's picture

Like the Arabs who were patsies on 9/11?

Thu, 07/19/2012 - 20:31 | 2634371 Bringin It
Bringin It's picture

Nice fight club shot to the collective status quo solar-plexus, Michael.

Thu, 07/19/2012 - 17:09 | 2633703 Pi'd Piper
Pi'd Piper's picture

Ghezali was arrested in Pakistan a week ago near the Iranian border... You don't think that they could have had anything to do with the "$50,000 in cash, maps indicating Western embassies, and--every religion student's best friend--an explosives belt" the group was carrying?

Thu, 07/19/2012 - 17:21 | 2633750 fuu
fuu's picture

He was arrested in 2009 not last week.

Thu, 07/19/2012 - 16:00 | 2633420 Racer
Racer's picture

no the banksters don't shit their pants, they shit on the someone who mentions a financial transaction tax......

Thu, 07/19/2012 - 16:02 | 2633441 Dr. Engali
Dr. Engali's picture

I hate to say it but I agree. This is getting to the point where it's beyond ridiculous. Maybe not a tax but a designated hold time beyond a few fractions of a second.

Thu, 07/19/2012 - 16:31 | 2633578 Xibalba
Xibalba's picture

Bernanke at 'work'

Thu, 07/19/2012 - 17:03 | 2633682 jwoop66
jwoop66's picture

Maybe only let humans play...

Thu, 07/19/2012 - 17:14 | 2633721 cossack55
cossack55's picture

Since SCOTUS says corporations are people too, maybe HFTs are human too.

Thu, 07/19/2012 - 17:30 | 2633781 LowProfile
LowProfile's picture

Impossible to enforce, just require each bid or offer be maintained for one full second...

Thu, 07/19/2012 - 17:29 | 2633777 LowProfile
LowProfile's picture


Maybe not a tax but a designated hold time beyond a few fractions of a second.

One full second.  That's all.  Just one second, to let the bid or the offer get hit.  Should be no problem if the bid or offer is legit.

99% of the population would be just fine with that.

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