The last couple of hours of today's US session were quite surreal for many cross-asset-class traders. As the following chart shows, the "need" for the S&P 500 to achieve 2,000 (and green post-FOMC) was evident in a 3-step process of manipulating VIX, USDJPY, and Gold. All they could achieve was 1,999.79 highs but not without an epic last minute VIXtermination effort...
Post-EU Close, stocks had started drifting lower... that will never do... So, enter "The Manipulators"
Goal: S&P 500 to 2,000
Begin...
Step 1: Sell VIX (VXX or VIX futures most liquid and/or use dark pools to hide the volume) - S&P 500 starts to rise..
but the momentum does not hold..
Unleash Step 2: Another VIX slam but throw in some JPY jiggery-pokery just to see if we can ignite the momentum and run those 2,000 stops...
Yep - that worked... any minute now...
Oh wait, it stalled at 1,999.79...
Step 2a: Try selling gold... that should keep the rally alive...
Nope... ok... last try...
Unleash the JPY - Step 3: RUN USDJPY through 109, take out stops and that shouldbring S&P to 2,000 and beyond...
We are losing it Jim... I cannay hold it
Step 3a... dump it, dump it all - VIXtermination at the close but stocks have folded by then...
Mission Unaccomplished... close but no algo cigar today.
[4]
Charts: Bloomberg
