Thursday, February 25, 2010

Update.. NOT so... very tight range today, PPT saves the day at 109 on the SPY

WELL WELL WELL, what do we have here.. another ridiculous out of nowhere rally in the SPY while the volume on the day was the lowest. This provides further examples of how the algo i mentioned yesterday operates. I do not have the green prints which started the rally because they were so fast it was impossible to screen grab them. I did grab the subsequent prints which were dumping the shares which lifted us off the 109.40 level. I agree it was a potential break out level, though without the "push" there is no way in hell we could have rocketed like this. Both the futures and the Cash were being pushing with vigor.

The climax was a 4 million share candle which formed in under 30 seconds. After that point traded sideways until 3:05 then boom more buy programs hit the market, with the buying simply not stopping. !NOT STOPPING. What is the catalyst, a ? Come on, who are you fooling, this market is the biggest lie I and many other esteemed intelligent market operators have ever seen.

I stated on twitter today, if we close green i am . I kinda hoped it would happen, looks like we are not going green..

Wednesday, February 24, 2010

Is the $SPY getting a "Jump" at key levels from a quant algo? High Frequency Trading

One of three key market participants on the New York Stock Exchange (NYSE). Supplemental Liquidity Providers (SLPs) are market participants that use sophisticated high-speed computers and algorithms to create high volume on exchanges in order to add liquidity to the markets. As an incentive for providing liquidity, the exchange pays the SLP a rebate or fee, which was 0.15 cents as of 2009 Now read on.

I am growing more and more tired of seeing what appears to be a very "helpful" algorithm running in the SPY. I am using the term "helpful" very lightly. I relate this algorithm to a jumper cable, your car will run once it takes the jump if your battery is running low right?

Now lets say volume our current market is equivalent to a discharged but not quiet dead battery. Symptoms of the market being a "dead battery" are sluggish movement through key pivot levels on a daily 1 min chart, along with violent price spikes within the 1 min candle.

So how do you fix a market which does not have the Umph it needs to remain liquid while not remaining flat all day after the initial 30 min opening volatility? A quant algo of course!

Tuesday, February 23, 2010

Ever wondered why certain stocks are a B*$%* to trade?

Well, ZeroHedge put out a great article this morning highlighting an report out by Goldman Sachs on hedge fund holdings (as of December 31, 1009). There is a lot of data hidden within this report, you must know which morsels to focus on though. I personally focus on the Top 50 page, which highlights the stocks hedge funds are all over. It is no surprise Apple is at the top of the list with 83 funds all dipping into the honey pot. *And you wondered why Apple is so hard to trade intra-day, you are up against a very formidable opponent(s).

Monday, February 22, 2010

Paint those futures.. Then drip drip drip

CHART UPDATE: top chart is newer
Today we had a very similar open in relation to last weeks price action, *gap up, then slow gap fill (fade) followed by a push below the opening range. These moves are hard to get involved with in my opinion because the range is so tight, you either have to be super quick and or very risk tolerant because you are either gonna be sorta right, or very wrong. The best trade today was letting off the gas waiting for a clear trend to develop. Though as you can see from the chart above a trend never really showed itself. You can argue the trend is down, but both my shorts and longs were not paying.

Sunday, February 21, 2010

Treasury to reinstate the Supplementary Financing Program?

This article from a few days ago, but still worth getting out there. With the US debt ceiling raised is the Fed going to start printing new T bill? If bills will not be used to finances government operations what is the real reason? You can draw you own conclusions after reading the commentary below by Morgan Stanley.

Thursday, February 18, 2010

Hours Before Opex The Fed Raises Discount Rate .25% to .75%.

*While you are reading you should listen to this track it gets you pumped...

How is THAT for some Man Benny boy really knows how to ruffle some feathers! I did not know Benny was such a great market operator! I can picture him yelling at Geithner this morning:

Benny: "TIMMY! Get over here I got a wild hair, tell your boys over at JPM to run this market straight up after 1 o'clock, I want you to sell everything and get short into the close"

Timmy: "Why?"

Benny: "Because i am gonna raise the discount rate .25% minutes after the close!"

Timmy: "Even with OPEX tomorrow?!"

Tuesday, February 16, 2010

Buh - BAYH! Senator Evan Bayh D. Indiana exits left

Granted i am sure you all know my political affiliations based on my ramblings, i was/am still shocked Senator Evan Bayh is not going to seek a third term. Being originally from Indiana i am very familiar with the politics of the area and specifically Bayh. He seems very level headed for a lib, but also beyond the aisle he in my opinion is quite capable of making smart life decisions. His decision to retire from office seems to be based on fairly solid facts most everyone can support, such as, "the current challenging environment" in Congress. Simply put, nothing can be agreed upon in both sides of the hill, nothing gets done because of the bipartisanship. I think it is a crock of shit, we need to be progressive, lets get one side of the asile to take charge and lead by example. Let the bigger man show his cards, Bayh changing the momentum could be the trigger for a new wave of political changes, potentially for the better.

The potential replacements the Democrats have lined up are not all that stellar, from my hometown you have, Rep. Brad Ellsworth D. 8th district (very GREEN and not experienced), but better than Rep. John Hostettler . All the ass dragger's in seats who do nothing but try to figure out ways they can secure their seats and pay checks need to go buh-BAYH and make way for those individuals who really want to right this ship. I look at Bayh's move as a positive for the stock market long term, not good short term.You might ask why not good short term?

Well, like i have said in the past any political uncertainty is never good for the markets, though the biggest problem is the GOP will let the house burn down around them. They will not vote yes on anymore spending and they sure as hell will not be pulling another AIG or C. GOP has a more, let the markets run their course naturally kind of mentality. Which i am all for. Larry Kudlow say's it best, "Free market capitalism is the best path to prosperity!"

Friday, February 12, 2010

Reading the Tape: A Few Signals Which foretell (SPY)

This morning we had a weak tape,(futures down, market traded down from gap price) I did not read much into the down open because we have been up triple digits the past two trading days. I approached shorts with caution because we gapped down and sold off rather fast on a steeper than average slope. *Shorting an already gap down market is never a high probability trade. Lately i have been waiting for a clear trend to develop before jumping into the deep end. Today was a great example of patience, UNLESS you are an extremely fast scalper, you should practice patience. IF you are a fast scalper you could have played the market short then long, but if you were patient, like myself, you would have seen the market was giving us signals it was going higher.

Wednesday, February 10, 2010

S&P500 something has gotta give. Long trap?

With the Greece uncertanty the S&P500 will be under increased pressue to the downside. In my opinion traders in the US really do not have a reason to buy stocks based on a bailout of Greece. From what i am hearing the bailout might not happen because there is not a EMU bailout clause.

The SPY(daily) chart on the left shows a clear uptrend pierced at the 111.70 level. On a 10 minute chart, there is a clear pennant forming, it is unclear whether it will break to the upside or downside. What we do know is the long trap could be developing, the long wicks of the last few candles indicates a tug a war between the bulls and bears.

Volume is confirming the war, you can see the volume steadily down trending from may 2009 until it spikes mid Jan early Feb 2010. The PPT is hard at work, though i feel we are back in the same position we were last year, nothing can really stop the "correction". Longs might get a bit of a bounce to close the small gap highlighted in Blue, but a sharp reaction to the downside from that point is probable.

Let the weak fail & the strong prevail . Greece.

First, lets start off with a link: TrimTabs CEO speaking on Bloomberg about US government cash involved in the recent market rally. Let this video's theme (propping, disguising) carry through as you continue reading...

Lets face it maybe the world should just start over, no problems have been solved only patched. The developing world has followed the "United States plan for success", which has recently as you know shown quiet a bit of holes! The world wanted to play our game, they wanted a piece of the action, the US being capitalists said, "Pay me, ill show you how we did it." These salesmen of the "United States plan for success" never told their developing country clients, "We have no idea what the hell we are doing, and on top we have have no exit plan." As soon as SHTF last fall the salesmen turned their backs on these countries, you really think Greece was their only client? NO, we failed they eventually fail. It is our MODEL, we have the instruction book right?!

Monday, February 8, 2010

How many times have we seen this chart? Hasbro

The open today was quiet with only a few names standing out. After the moves in the market late last week i am fully expecting a boring flat day today. As you can see we are literally flat on the day as of 1:35. The market needs time to digest, i still think we move lower over time. Notice how down candles are quicker and more violent then the steady slow up candles.

Sunday, February 7, 2010

For all you football fans... Go Colts.