A place where a skillful caddy always offers cool contemplation when it comes to your "stick" selection.
Creditcane™: Tired of getting gored by the bulls.
SPXBullish long day. Midpoint above EMA(10). Still above all SMA's. Made a new 0.0% retrace. New high on daily 3LB (reversal is 1324.57). QE2infinity. JBTFD…
DXYBearish short day. Midpoint above EMA(10). Still above the 14.6% retrace (77.54). Tested but failed the 23.6% retrace (78.72) again. Still above SMA(21). No daily 3LB changes (reversal is 77.90). Back below weekly 3LB mid.
VIXBullish short day. Midpoint above EMA(10). Still below all SMA's. No daily 3LB changes (reversal is 16.69). Still out of the "no fear" zone. Currently has a monthly 3LB reversal.
GOLDDoji day. Midpoint above EMA(10). 0.0% retrace holding. Now above SMA(89). New high on daily 3LB (reversal is 1364.10). Must have the precious. Also still above weekly 3LB reversal price.
EURUSDBullish long day. Midpoint below EMA(10). Back above 1.3506 (the 50% retrace). Still below SMA(21). No daily 3LB changes (reversal is 1.3675).
JNKSpinning top day. Midpoint above EMA(10). Still above all SMA's. Held above its 50% retrace (40.47). Still testing and failing trend line. No daily 3LB changes (reversal is 40.63).
10YR YIELDSpinning top day. No test of 0.0% retrace at 37.44. Still above all SMA's. Midpoint above EMA(10). No daily 3LB changes (reversal is 35.20).
IQISpinning top day. Midpoint below EMA(10). Back below all SMA's. Closed above its 23.6% retrace (11.68). No daily 3LB changes (reversal is 12.30). Still below weekly 3LB mid (11.76).
TLTSpinning top day. Midpoint above EMA(10). Still below all SMA's. Now testing lower trend line. No daily 3LB changes (reversal is 88.19). Currently does not have a monthly 3LB reversal (down).
EEMBullish long day. Midpoint below EMA(10). Below all SMA's except the SMA(144). Still above its 38.2% retrace (45.06). No daily 3LB changes (reversal is 46.76).
50 comments:
"For those of you here that are true believers in POMO being the reason markets are up, how do you conclude that $600 billion, which has not even been fully implemented yet, can alter the course of a $16 trillion dollar market cap?
show me the light!
- Ben"
I'm not surprised that the POMO should be a 50/50 shot. Afterall, these morons PUBLISH their schedule ahead of time. So, traders do some front running. Similar to the way Bill Gross front ran everyone on the FNM paper and how Tepper front ran the government on the banks.
They're geniuses I tell you.
I think the FedRes role as the omnipotent overseer of everything is overrated. In the long run, nobody is bigger than the market.
But, I would suggest that front-running, or POMO "anticipation," is the primary reason it's more or less a coin flip.
Chet's three peaks and dome pattern* gets out a shoutout at BI:
http://www.businessinsider.com/dont-look-now-but-markets-are-making-an-ominous-three-peaks-and-a-domed-house-formation-2011-2
* I give Chet credit on that one because I had not heard of such a thing until he mentioned a long time ago....
AT,
do you know of anywhere you can find info on dark pools, lots of people claiming you ignore volume because more trades are being done there, I'm setting out to find out if this is true or not.
- Ben
Ben
Dark pools are used to offset HFT. Can't beat a bid if you can't see it. IMHO.
Ben
So far I can't find anything about the volume of trades in dark pools.
"For those of you here that are true believers in POMO being the reason markets are up, how do you conclude that $600 billion, which has not even been fully implemented yet, can alter the course of a $16 trillion dollar market cap"
b22- dude- I have seen you say in the past to "end the Fed" (and I don't disagree)- but why end the Fed if they are too weak and ineffective to impact the market?
Also- the way I look at POMO is this- PD's buy the treasuries- the Fed buys from the PD's- money made risk free to do as you wish- why not buy some stocks (thereby creating demand- keeping the bid under the market)instead of taking the riskier bet of lending it out?
I'm a simple man- so I look for the easiest explanations
@6.16
Fantastic question....
For whatever reason, I typically ignore volume, and always have. Old schoolers think it's important, and I guess in some ways it can be useful.
The reason I don't care is this:
Whether I'm getting steamrolled by 100 traders, or 1000 traders, it makes no difference as I would be getting stream rolled regardless.
But, now that you mention the idea of "dark pools"....it makes me care even less about volume. I know that Goldman Sachs basically has it's own exchange for larger orders...
"dark pools, lots of people claiming you ignore volume because more trades are being done there"
there was a trader at slope of hope claiming this- I threw it out there for everyone to kick around-
is it possible? Makes sense in a way- as the exchanges are being bypassed even for IPO's which was done privately just recently for Facebook
b22/Andy-
re the exchanges (as they're used by the market makers) it almost seems like a vision from a Terry Gilliam move-
these huge electronic slot machines-
taking everyone's quarters (or half dollars from the old days)-
until the house is left with all the money
(I have an active imagination)
edit-
last post-> move = movie
@Ahab.
There has been a ton of research done in the past on banks' "trading profits." Almost all of the money a bank makes in prop trading lies in taking out the "bid/ask" spread....
It's why large market makers in more illiquid instruments, i.e. Emerging Market debt, MBS, 100,000share blocks of xyz company, etc... RARELY have losing days or weeks....
They don't trade until they know they've got someone on the other side or they're getting "extreme" value and know they can lay the risk off on someone else down the road.
"They don't trade until they know they've got someone on the other side"
by blowing out stops and forcing folks to cover?
but Andy- don't you agree that a large participant making a move in a stock will affect the price?
all I can find are some half assed articles that state peoples opinions on how big the dark pools are, some claim it's 2-3% of total volume, which is small but it's like a giant black hole where you can't find information on how big it really is. I've read other places that guys like J. Simon at RenTech do huge operation in dark pools.
I will say this, every single book I've purchased for the CMT stresses that volume should always be a secondary indicator. every single one.
anyway, ahab,
this:
but why end the Fed if they are too weak and ineffective to impact the market?
My opinion is that NOBODY should have a monopoly over a nations money supply, and why should I blab on about why, read quotes from guys like Andrew jackson on that topic, and so my call to end the Fed has nothing at all to do with how effective they are.
AT,
7:50
exactly! this is why it shouldn't be so shocking to see things like JPM only loses 8 days in 2010, the market handed it to a more sophisticated player. Oddly enough, the same website touting that as rigged was making claims JPM was going to go BK due to some massive silver short what....6-7 months ago.
- Ben
pffft.
b22-
who knows- dark pools are mysterious and unknowable- (lol!)
I just thought it was intriguing so I threw it out for everyone else to take a stab at it-
I guess if it's all private- then it's all conjecture-
also- much truth regarding the hyperbole at ZH- many of those over there seem quite transfixed. . .
. . .in the end- I am always just trying to understand-
and in the past (for me anyway)- the simpler the explanation- the easier the trade and the more the $$$-
sometimes you get frozen with too much data and start second guessing every move-
I made a lot of $$$ in the housing boom with my only protection to sell builder stocks . . .and also the luck- that I was going to visit China for an indeterminate amount of time in 20007 and stuck all my money in cash because I didn't want to have to worry about my positions-
for the most part it's been there ever since-
and that's because of the shock of the carnage I saw everyone else experience
I dont find volume irrelevant at all... in fact, it is one of the primary tools I use to identify future highs and lows.
In my overstanding, the dark pool phenomenon is nonexistent in the futures markets.
I'm sure it would depend on the specific type of security, ie certain swap derivatives never trade on an exchange period.
If we are talking exclusively individual equities or bonds, I am almost certain that the vast majority of volume is on the exchanges, and all trades recorded on the electronic OTC market.
Unless you are working with a specific stock or bond cusip, I wouldnt spend much time on the general investigation. This type of analysis is probably most fruitful on a case by case basis.
"but Andy- don't you agree that a large participant making a move in a stock will affect the price?"
Yes. I agree. Here's an Axiom: "In the long run, nobody is bigger than the market; in the very short run, anything can happen."
It sure sounds less than kosher if someone can move a gazillion shares of anything below the radar of the market at large... even if someone else is willingly taking the other side. In fact, I am completely unaware of how that would even be possible.
If the counterparty is simply some kind of "off balance sheet" entity of the same parent bank or holding company, then thats just outright securities fraud.
I'm sure it happens though, especially with all the bank sponsorship of different obscure hedge funds that engage in private shit.
I-Man@8.42
That's why it takes all types to make a market. You find volume very important. I don't really consider unless it feels like a "blow off top" in the making or a "capitulative bottom"...
i.e. The pukefests in late 2008/early 2009
I mean, whats a couple billion in derivatives exposure amongst friends?
8:49
Agreed.
Maybe someday we'll trade crude together, and I'll see what this texas shit is all about.
It may be my next conquest.
"It sure sounds less than kosher if someone can move a gazillion shares of anything below the radar of the market at large"
Agreed. I can tell you, though, there is a big market out there of "things" that trade that the general public has no knowledge of and cannot even research.
e.g. A country, like Qatar, wants to sell 1mm bbls/mo of 2015 Brent Crude Oil $150 Strike Call Options...where do they go? Where does that stuff trade?
That's a specific example of something I'm familiar with. If that kind of stuff goes down in the very small commodity world, I can only imagine what sort of derivatives are going down on stocks and bonds.
"I mean, whats a couple billion in derivatives exposure amongst friends?
too funny!
"Maybe someday we'll trade crude together, and I'll see what this texas shit is all about.
It may be my next conquest."
As Alec Baldwin said in one of the greatest move scenes ever: "It takes Brass Balls..."(5:35 in this clip)
Coffee is for Closers
ahab,
8:26, nice post man, I am fond having lots of cash at times, and have had a lot more lately, the industry hates cash but I've seen too many basic technical studies done on things such as dow theory tested over 100+ years and sometimes stepping away from markets and staying in cash when it is not clear that probability is far on your side is without a doubt the right thing to do.
As for trying to understand everything
you, me, and everybody else.
- Ben
This is sort of a short essay on Reason.com, a definite Libertarian site.
The End of the American Century
It's pretty edgy stuff coming from one of those "crazy Libertarian" places backed by the evil Koch Brothers....
heh heh.
I-man,
I do think volume has value in terms of overall analysis, for example, in head and shoulders patterns it's best to see a rise in volume on the breakout of a neckline broken to the upside or that it is ok to see volume peak in the head or left shoulder of a topping pattern but typically you shouldn't see it peak in the right shoulder of a topping H&S, the inverse of these are true for the inverse H&S or what some people are now calling a "Kilroy" bottom
same thing with triangles, you often see volume diminish within one until a breakout
and on and on
but I always consider volume secondary to price and form.
- Ben
Andy-
best movie about sales ever made-
hard and lonely business . . .
b22-
I like having cash- even though it's paper- because I can use it for something-
hopefully I do something before it is just paper that I can't use . . .for anything
AT,
The derivatives markets, many of which could just be lumped into the pile of IOU's, are effing huge
I've seen estimates above 600 trillion, so yeah, I could only imagine the stuff that gets moved around
- Ben
GlenGary is one of my all time favorites. So many things make that movie awesome.
- Ben
Decent read on dark pools: http://www.impconsults.com/docs/imp_darkpools.pdf
from page 18:
Reported Volume
In the industry there is real problem of reporting inaccurate volume. For example, take the case of 3 dark pools, dark pool A, B, and C that share liquidity through a liquidity provider agreement. If a Seller sells 1000 shares through his dark pool A, and dark pool A is unable to meet it, it may be passed through to dark pool B. Meanwhile the match of the 1000 shares is coming from a buyer in Dark Pool C, who does not have the liquidity and passes it through to dark pool B where the match occurs. What has happened, and still happens is the reporting of volumes looks like this:
Dark Pool A reports: 1000 shares
Dark Pool B reports: 2000 shares
Dark Pool C reports: 1000 shares
Total Reported Volume: 4000 shares
Each dark pool may report this differently. As you can see, the order volume could potentially be reported as 4x the actual number. On an exchange, the volume of a match is reported on the match (i.e. 1000 shares), not both sides independently (1000 for the Buy, 1000 for the sell). This double-counting has led to some doubt regarding the accuracy or dark pools’ reported volumes. Industry statistics have claimed the total dark pool volume is has high as 7-10% of the total U.S. Equity trading volume. How much faith should one put in this number?
so Ra-
you're saying share volume could be overstated?
ahab
Each dark pool reports volume differently. Some may report matched trades and others report each trade individually.
Ra-
interesting . . .maybe it's the contrary of common perception-
maybe volume is overstated?
thanks for the sleuthing!
If I were looking for info on dark pools, I would look to the DTCC numbers. They may trade off exchange, but they don't technically own anything unless/until it's registered with the DTCC.
anon-
so dark pools need to be reported?
interesting this:
"In 2007, DTCC settled the vast majority of securities transactions in the United States, more than $1.86 quadrillion in value"
@10.32.
Eh. Quadrillion seems like a big number....
G'Night all, even the lurkers....
andy, that coffee was for closer link was lacking.. did not work in other words.
as for the 3peaks and a domed house.. that came from one of the links i was following and passed on.. chet and i both gravitated to it and referenced it repeatedly..
@K.
You always bring me back...past my bedtime.
Ok. I forgot that you brought up the 3P+Dome. You get attribution. I failed there...
But, c'mon. The Glengarry Glen Ross "Coffee is For Closers" speech?!?
That's probably the Top 10 best movie scenes of all time!
And, I'm not joking....
Ben @ 9:35.. that was the movie..
i do know sales.. was married to sales for 25+ years..
i would kiss him off in the morning, "sell something!" he loved that! i just said that for the fun.
Seriously, it's past my bed time. I need to "close" some stuff tomorrow....
ABC....
Well, Andy, we agree.. it is just that your link did not work~!!
c'mon Karen-
I didn't even click the link-
because I know it by heart
ahab, whatever!! i'm always up for a surprise and his effing link did not work!
Ben @ 9:35.. that was the movie..
?
yeah, that's what I was talking about, I was able to get the link to work.
- Ben
Karen-
here you go-
Always Be Closing
Reading through this thread seriatim, I thank God for Karen! Without her (and Jennifer) this blog would be pure testosterone. We would all trade our way to extinction, with one eye on the football.
Now you swear and kick and beg us
That you're not a gamblin' man
Then you find you're back in Vegas
With a handle in your hand
Your black cards can make you money
So you hide them when you're able
In the land of milk and honey
You must put them on the table
i'm going to bed.. i lived with 10 times that intensity for too many years.. in my undeserving face.. see you all in the morning..
@gristle,
tomorrow we can go back, jack, and do it again.
- Whammer
Still one of favorite scenes from this movie: http://www.youtube.com/watch?v=U_Xek7IQhlw
Warning:graphic
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