Larry Levin’s Blog : INTERESTING Back to day trading platform , Larry Levin today will bring you some news sounds “Interesting”. Would you like to hear?
Thursday was an interesting day: several things that make you go “hmm” happened. First up was the weekly jobless claims data, which was far worse than expected. I almost didn’t include this but I had a thought – didn’t Fraud Street tell us just a week ago that ONE single oh-so-slightly-better-than-expected report was starting a new trend? Not so much.
It sucked and unemployment is getting worse. Fraud Street analysts and economists were wrong again. We learned that Warren Buffet has bailed out the banking sector via his huge $5billion “investment” in Bank of America (BAC).
BAC has been getting hammered lately because, well, it is insolvent at its core. All of its proclamations to the contrary are hogwash. Since the Congress is unlikely to directly bail out BAC when the time came and the FDIC couldn’t insure all of its deposits, I am of the opinion that a backdoor deal was made.
When I heard of the news this morning, the very first thing that struck me was the phone call made by president Obama to Warren Buffet just a few days ago. It was reported that the Teleprompter in Chief was asking for advice on how to get the economy rolling, which by the way, would mean that he has no faith in his chosen economic advisors.
But that’s another issue. The “economic advice” was a red herring; a cover story for the real reason: a presidential guarantee that Warren’s $5billion “investment” was money-good, backed by the taxpayer of the USA. Ahh yes, the “free market” at work.
We also learned today that hurricane Irene is locked on to both Washington DC and Fraud Street. Interesting, indeed! I wonder how long it will take the Keynesian clown posse to CHEER the destruction, for it will bring forth economic revival they’ll say.
Oh, if only it could have been a Cat-5 they’ll say…maybe a baker’s dozen of them…then they’d really have “economic revival.” Idiots, every last one of them! Goldman Sachs is expecting a QE3 announcement of $1TRILLION more counterfeit dollars at the J-Hole conference.
And finally, there was a very interesting market movement in the afternoon session that had people across the country scratching their heads in collective wonderment. Out of nowhere there was a large price spike that drove the ES straight up for exactly 2-minutes. The initial move was very fast and ALL BUYING as you can see in our 3rd chart below.
As it turns out, this movement was yet another HFT market manipulation trade. The next two charts come via ZeroHedge, which are generated by Nanex’s special software. This first chart catches the HFT brigade “quote stuffing,” which is the practice of massive amounts of fake orders flooding the exchanges that are nearly instantaneously cancelled that overwhelm the system and rig the bids and offers.
From ZH “…we know that every time there is a massive spike in hollow trade (as in without intentions to cross bids or asks, something everyone but the SEC and the HFT lobby believes should be a felony offense), the market is programmed to either rip or plunge.
Sure enough, at just after 3:19 pm we saw an epic spike in empty packets on the NYSE, which set off red flags and immediately prompted us to observe the move in ES, which naturally confirmed that an HFT driven coordinated buy order (no block) was going through and pushing the ES well on its way to VWAP. Market manipulation no longer needs anything more than a coordinated packet stuffing dump, as what happened on May 19.”
Interesting; wouldn’t you say? But not everyone was on the same page. As you can see on our chart below, after the initial spike drove the market higher, some huge sellers continued to slam the bid. As you can see; however, all of that selling was swallowed up by the HFT robots and continued to push the market up.
In two minutes time as if, umm, someone turned off a computer, the packet stuffing ended and the buying stopped cold. Moreover, the big-boy sellers who had just been rolled by the HFT onslaught began selling again. The market wound up tanking right back to the low of the day. So as you can see, the whole spike (6-points in 120-seconds) was nothing more than another HFT manipulation game.
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.