By Hedge Ly
Thursday, September 30, 2010
Interactive Brokers Puts The Clamp Down On Option MM's (SPX)
The past two years the options markets have seen all kinds of screwy crap go down. Including liquidity drying up, penny wide markets, synthetic market makers making markets inside already quoted markets, not honoring quotes etc etc. Apparently Interactive Brokers is not happy with the bullshit either. Their computers cannot even keep up with speed of their customers computers. The HF firms are causing interactive brokers to lose money...
Regulate this junk and be done with it or bring back a human market maker.
Regulate this junk and be done with it or bring back a human market maker.
(Bloomberg writes) Interactive Brokers Group Inc. may withdraw from some options market making because its regulatory obligations allow firms with the fastest computers to take advantage of the company, Chief Executive Officer Thomas Peterffy said.
Most exchanges require market makers to provide bids and offers in options across many strike prices and maturities. Because the contracts are derivatives whose value is tied to stocks or exchange-traded funds, market makers must constantly update quotes to reflect price fluctuations in the underlying security.
Mid Day S&P500 Futures Update (FAZ)
WOW, the difference POMO days make! The range today was another blood boiler as GDP and claims came in a bit "better" than expected. Everyone knows GDP numbers are all bullshit and CNBC loves putting positive spin on these indicators. Really gets the retail to buy the bags up shit up at highs of the day so the big money has bids to sell into. makes me sick.
The high today in the SPOOZ was 1153.5... LOW 1133.25. Quite the range i would say, the selling prevailed over the low volume pre market futures ramp. You gotta give the powers to be the credit they really did make this market look GREAT this morning.. Though you now if you have been reading my blurbs you know its BS.
China Is Manipulating Currency? You Don't Say? (UUP)
(AP writes) The 348-79 vote Wednesday sends the measure to the Senate, where its prospects are unclear. Senate supporters hope to get a vote on a similar proposal after Congress returns following the November congressional elections.
Supporters said the bill would allow the Obama administration to pressure China on an issue that they say has led to the loss of more than 2 million manufacturing jobs in the U.S. over the past decade.
The vote came as lawmakers scrambled to wrap up unfinished business so they can hit the campaign trail with a little over a month before the Nov. 2 elections. Polls show that the state of the economy and an unemployment rate that remains stuck at 9.6 percent are the top concerns of voters.
The measure was passed by a wide margin with 99 Republicans joining Democrats to vote yes. Those
Green Mountain Coffee Double Roasted? (GMCR)
As you know the stock is subject to a SEC inquiry into how they are recognizing revenue. When the pot smells burned, the coffee is surely roasted. Another sad story of bullshit. Stock goes to the moon, insiders sell, stock splits, rallies then tanks. Now the question is how many pots have they totally roasted? According to Barron's many more...
(Barron's writes) Before Wednesday's opening bell, the Vermont-based maker of Keurig single-serve brewers and coffee products said the Securities and Exchange Commission had launched an investigation into company practices.
Wednesday, September 29, 2010
Late Night S&P Futures Update (SPY)
Fairly quiet on the battle front tonight, no real ramping to report on. Though we did get a bit of an up tick around the 8 o'clock hour. The futures have seen heavier offers tonight ahead of tomorrow and Friday's economic numbers. Though most of these "forward" indicators seem to mean nothing, they are still fun to trade.
Resistance being 1142.25
Support 1137.75
Tomorrow's economic calendar
| 8:30 am | Jobless claims | 9/25 | 460,000 | 465,000 | |
| 8:30 am | GDP revision | 2Q | 1.6% | 1.6% | |
| 9:45 am | Chicago PMI | Sept. | 55.0% | 56.7% |
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Can The Daily Ranges Get Any Worse? (SPX)
If you follow me on twitter you know today i just about lost my mind. Today had all the trapping of another bullshit zig zag up at resistance in the Spooz. The trappings included the standard overnight offer taking at random times and at random prices pushing the SPOOZ up to 1146.75 in the wee hours of the morning, 3am. This helped moved the futures a bit higher into the Wednesday mid morning.
Here is our range today, we had about six major move/pivots/trend changes whatever. These moves are highlighted in the chart above and numbered.
1. Rallied off opening lows of 1138.75 to 1142
Late Night S&P Futures Update (SPX)
Fairly quite this evening/night... though we did get the standard evening ramp around 7 eastern, or 1900 hours. WE moved from 1142 straight up to 1145 before selling back hard down below 1142. IT looked like there was a bit of EUR/JPY movement, possibly more intervention who knows.
The chart above shows a 1 minute with a giant pennant formation.. looks like the price has broken down through support. Keep an eye on the 1144 level.. I the futures move higher than 1146 we are gonna gap tomorrow.
A breach of 1141.75 could bring further selling...
Mid Day S&P500 Futures Update (FAS)
Good afternoon traders, today is another day of interesting trading as we came in down off the open for the 3nd time this week. only to retrace and briefly touch green on the day above the 1142 level. Currently we are at 1141.50 coming off a break out of a wedge pictures above at the 1140 level. Clearly this market is a technical market, though you cannot use volume as a forward looking indicator on price. The lower the volume the higher the move as we have all seen the past 2 years. The market is flat on the day currently, it is anyones guess as to where the machines will drift us during NYC lunch, though im guessing higher.
As for the other futures levels today, we are looking at intra day support being 1136 and resistance being 1142.25
The options markets are rather quiet today, and this year.. with DELL and WDC calls active. Other notable movers are RIG and BP in the energy space, as well as GMCR on the downside. You have banks getting hit today with BAC GS and DD (regions financial) all seeing business on the bids.
also NFLX is up at all time highs again, as well as spot GOLD GC_F
Tuesday, September 28, 2010
No CNBC "tweets" Do Not Move Markets (SPY)
I just finished reading an article by CNBC covering the topic of false buyout rumors being 100% false this month. The article started off well stating, out of the "74 rumors this month, not one has materialized"; fine that is standard. The "chowder" mill is always turning, the key is to trade them and get the heck out without falling in love. The problem is most "investors" do not realize this and get caught up on the "dump". These rumors are good for intra day scalps, thats it....
What honestly caught my attention was the sentence:
"Theories abound on why rumormongering is so rampant (and so wrong) these days. Some blame the massive social networking sphere, where one "tweet" can sink a stock like the Titanic."Are you serious? I think the author might be mistaking "tweets" for the ridiculous crap that comes out of the
Watch Out! Iran Now Has Flying Boats!
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| image: cnn |
The Iran saga continues with another twist, after last month revealing they had produced a flying drone capable of spying and carrying weapons. IF that is not enough to stem the tide of the world super powers, Iran now has "radar evading, flying boats", equipped with machine guns.
Looks like all the sanctions from the UN are doing a really good job keeping raw materials out of the state. Oh well, looks like could build this in my backyard shed with 5 grand and a set of Snap-On's
(CNN writes) Iran unveiled three squadrons of new flying boats on Tuesday, Iranian news agencies reported.The craft, dubbed the Bavar 2, is armed with a machine gun and carries surveillance cameras, according to a report from the Iranian Student News Agency.
Its 4:00 Do you Know Where Your Money Is (SPY)
Not much has changed since my mid day market update, though we have gong basically straight up breaking highs a bit after noon NYC time. What is interesting is the POMO today, which the Fed bought $550.0 million in TIPS from primary dealers. This injection of liquidity was substantial enough to ramp the Dow 90 points the Q's nearly 26 handles as well as ES complete reversal off 1127.50 all the way to 1142.50 where we sit currently.
Let me ask you two questions: Do you think it was value investors buying the market today? Do you think it is coincidence the market seems to gravitate towards VWAP and TWAP?
Mid Day S&P500 Futures Update (SPY)
Again today we have seen another wild range, even with the VIX at rather low levels in relation to the past 2 years (VIX 1.3% was +8% off open) historically we are still high but does not warrant the intra day swings which revert to mean every day. What do these signals tell me? They tell me there are firms out there waiting for a market mover to pull the trigger.
As for the SPOOZ we opened to selling right off the 1140 level, all the way down to 1127.25. This fall was precipitated by AAPL which is 20% of the NDX 100. Once we bottomed out today's POMO started, this carried the market all the way up to the 1141.75 level before retreating on lack of liquidity and volume. you can see the volume decrescendo above in the chart. You think its coincidence? hell no its not. This market is being propped. IF we push back into the red today below 1138 we should see some more momo selling from the trend chasers.
As you all saw on twitter today, i got a bit wild. But you know what someone has to get the word out... Look for my next post on AAPL mini crash..
Morgan: Great Headwinds for RIM (RIMM)
Morgan See's Rim's global smartphone market share dropping to 13% in 2013. Rim is betting heavily on their BBM service, a lot of pressure on one tiny app. I do use the BBM application but it is not something i must have or cant live without..
Morgan's concerns are based on the following 4 items:
1) The ongoing chorus of international countries threatening to shut down Blackberry service;
Monday, September 27, 2010
S&P500 Overnight Update (SPY)
Fairly quiet tonight, not to much going on. Though we did have a greatly muted futures ramp this evening, starting at 8pm @1137.25. The ramp moved the ES up into the 1140 level only to fall back. I hit earlier on twitter about the possibility fund managers are offering ES and whacking bids to stem the nearly automatic futures rise overnight. They could be doing this because they are dipping more short as we have been chopping at this level for a week now without any true confirmation of trend.
Notice the large pennant/flag down trending price range of lower HIGHS and lower LOWS.
Support 1137.25
Resistance 1139.75
UFOs Over Nuclear Sites; National Press Club Sept. 27, 2010
Very interesting video, gets your mind off the markets and on another topic somewhat related ..
RIM Officially reveals the 'PlayBook' Tablet (RIMM)
Rimm stock got a lift after hours on the announcement, moving from 48.50 to 49.50 quickly before settling back to the 49.15 range.
The machine boasts 7 inch screen. 9.7 mm thin. Full web which does support flash. It will have a 1ghz dual core processor
(Marketwatch writes) At the company's annual DevCon conference, the company introduced the PlayBook as the "first enterprise-ready tablet." Co-CEO Mike Lazaridis said the device was intended to "amplify" existing BlackBerry smartphones.
Late Day S&P500 Futures Update (BAC)
Again another interesting range we have today, trade down initially off the open, then Apple pulls the market into the green near lunch. NYC gets back to the desks and we have a nice late market sell off. I have been chirping about these levels all day.. the 1139.50 level was the support to test, here we are through the level on volume, after failing to break overnight highs of 1149.75.
Bank of America has been the dog of the day today, down nearly 2.5%.. The tug of war was between AAPL and BAC. BAC wone with the larger volume taking down the entire XLF as well as the greater market... PATIENCE ...
The Market = Apple (AAPL)
As you may or may not know, Apple makes up 20% of the Nasdaq 100 or the NDX. NDX options are very margin intensive thus really only the big boys play in them, they also know how components of the index can move the nasdaq around as well as other index's. Bloomberg released an article this morning highlighting how Apple is like "training wheels" for the NDX. The article asks the question, how will the NDX trade if Apple was not as large of a component?
(Bloomberg) "Apple Inc.’s surging share of the Nasdaq-100 Index shows the benchmark is saddled with a stock- market equivalent of “training wheels,” according to Mike O’Rourke, BTIG LLC’s chief market strategist."
Mid Day S&P500 Futures Updates (SPY)
Today we saw quite a bit of M&A activity which gave the futures monster a reason to ramp futures into the 1149.75 level off the CME Globex open.. As the regular US cash session opened sellers were in control taking the SPOOZ down to the 1139.50 level as the low of the day. Below 1139.50 should bring a fresh batch of sellers. Though AAPL is bidding pulling the entire market wherever the hell she wants it to go. Apple goes up, the market comes with it, the market was not designed like this.
As you can see from the chart above the SPOOZ is in a descending triangle which has taken sometime to form and become quite skinny, this signals the formation may fail to the upside instead of continuing down through 1139.75. Apple over 293 will for sure cause this triangle to fail to the upside.
Sunday, September 26, 2010
Sunday Evening Futures Update "The Phantom Buyer" (SPY)
It is 8:30 on September 26,Globex opened up about 2 hours ago, the phantom buyer ramped the futures 4.75 handles in about 4 minutes. The S&P's traded up to 1149.75 testing the level two times before retreating back to 1147. We are up 4 handles from NYC close on Friday, not a single thing has changed around the world for the better the last 48 hours, though i guess whatever did change was good enough for a 4.75 handle run up as soon as the futures opened.
It looks like the futures are going to break down through 1147.50, though the longer a triangle takes to form without breaking out the more likely it will fail in the opposite direction. IN the case of the chase above, it would not be crazy to see the descending triangle break out to the upside over 1148.25.
Wall Street 2 "Money Never Sleeps" Pulls Down 19million (Wall Street)
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| NY Post |
What i am saying is, a lot of people who see the film whom are far removed from the industry may honesty think Wall st operates in the way the director depicts. Oh well, entertainment is entertainment.
(AP writes) Movie fans are investing in Michael Douglas and Oliver Stone's "Wall Street: Money Never Sleeps," which opened as the No. 1 weekend movie with $19 million, according to studio estimates Sunday.
Saturday, September 25, 2010
Pentagon Purchases & Destroy's Army Officer's Memoir
Fairly disturbing headline if you ask me, looks like all the horrible things you hear about the war in the Afghanistan are probably true. Anthony Shaffer Army Reserve's memoir apparently is so in depth national secrets are apparently at risk. Rumor is the first edition is on ebay for 2,000$.
(CNN writes) "DoD decided to purchase copies of the first printing because they contained information which could cause damage to national security," Pentagon spokeswoman Lt. Col. April Cunningham said.
In a statement to CNN, Cunningham said defense officials observed the September 20destructionof about 9,500 copies of Army Reserve Lt. Col. Anthony Shaffer's new memoir "Operation Dark Heart." Shaffer says he was notified Friday about the Pentagon's purchase.
The article goes on to elaborate on the books contents, including blacked out lines.
Friday, September 24, 2010
INTERVENTION # 2 JPY style. (UUP)
(Bloomberg writes) “There’s rumors of intervention,” said Adrian Foster, head of financial-markets research for Asia at Rabobank Groep NV in Hong Kong. “The low 80s appear to be their broad line in the sand. They’ve got an awful lot of bullets to fire.”
The yen dropped 0.7 percent to 84.94 per dollar as of 6:21 a.m. in London from 84.38 in New York yesterday, after earlier falling as much as 1.1 percent, the most since Japan intervened on Sept. 15. The currency weakened 0.9 percent to 113.31 per euro. The dollar fell to $1.3335 per euro from $1.3314.
Thursday, September 23, 2010
It's 8:15PM. Do You Know Where Your Money Is? (SPY)
The regular session equities market is a trillion++ dollar market not easily manipulated by one entity, unless collusion is involved. cough, federal reserve banks, cough.
So now that you know the overnight futures markets are thin with very little notional value lets draw a few
Market on Life Support. Who Will Pull The Plug? (SPY)
The last 4 weeks has presented nothing but an examination of shorts. Longs keep on cheering, though i really fucking doubt you "any stock i pick goes up because i am the best stock picker in the world" longs actually pulled the trigger down at 1040. Volumes do not matter you should all know this by now, but its just a big farce. The illusionary market completely disconnected from economic data that has once again defied logic.
The market does not move every single day from 10:30 till 3pm. The market volume during this time is so low lower indicators get fouled. keep watching, the more people who understand this the more the games will change.. for the better ..
Nice sell off today out of nowhere, just as CNBC is cheer leading all time Apple highs.. Apple single handily pulled the entire market down, we GOTTA get the ETF correlations under control....
The ES went from less than 800 contracts a minute near 2;45 to over 14k and then 26k a minute out of nowhere. The trend flip flopping is destroying every single person who dares to dive into this god forsaken market. Only ones who can make money are those parties who have enough capital to move the markets/manipulate drive down bids and drive up offers, stuff quotes, flash orders or even DISSEMINATE BULLSHIT TO CNBC!!! coincidence's are a myth in the stock market.
The market does not move every single day from 10:30 till 3pm. The market volume during this time is so low lower indicators get fouled. keep watching, the more people who understand this the more the games will change.. for the better ..
Nice sell off today out of nowhere, just as CNBC is cheer leading all time Apple highs.. Apple single handily pulled the entire market down, we GOTTA get the ETF correlations under control....
The ES went from less than 800 contracts a minute near 2;45 to over 14k and then 26k a minute out of nowhere. The trend flip flopping is destroying every single person who dares to dive into this god forsaken market. Only ones who can make money are those parties who have enough capital to move the markets/manipulate drive down bids and drive up offers, stuff quotes, flash orders or even DISSEMINATE BULLSHIT TO CNBC!!! coincidence's are a myth in the stock market.
Wednesday, September 22, 2010
A Few Federal Reserve Bank Graphs To Stew Over..
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| Stone & McCarthy |
Depository institutions held $1.033 trillion on deposit at Federal Reserve Banks and another $42.9 bln in vault cash. more charts below...
Trouble Brewing At Johnson & Johnson? (JNJ)
(Reuters reports) "The committee said the agreement purportedly allowed McNeil to forgo a publicly announced formal recall of the Motrin product and to instead conduct a "soft market withdrawal." The committee for months has been examining what it describes as the "phantom recall" of Motrin, in which contractors quietly bought up stocks of the painkiller from store shelves."
Community Central Bank CEO Missing (CCBD)
(Globe News Wire reports) "Ray Colonius, Chief Financial Officer, was appointed interim CEO, subject to regulatory approval. Mr. Colonius, speaking on behalf of the Corporation stated, "we are all terribly upset and concerned regarding Mr. Widlak's disappearance. The Bank has found no evidence of anything missing and we are conducting business as usual, but are very concerned about the safety of our friend, Dave Widlak."CCBD stock is down nearly 30% on above average volume.
Tuesday, September 21, 2010
Thirteen Days Of Afternoon Futures Ramps in 3.5 Weeks (SPX)
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| ES_F 30 min chart |
It is becoming more and more obvious the futures are placed on a shelf every night so the cash market gaps in the AM. Most ETFs are all tied to the cash markets and we know all equities all correlated 87% to the SPY. Makes total sense. What they are doing is manipulating the futures markets with pennies on the dollar compared what it takes to ramp the futures during regular hours, GENIUS! Chart info after jump
Top Economic Advisor Steps Out Of Office (Lawrence Summers)
He is heading back to academia lecturing at Harvard. Hell will probably make double the money at Harvard and can spout psycho babble to all those who pay to hear it. The Obama administration said of Summers exit, "this was part of his long term plan".. If this was part of his plan why in the hell did sign up.
(AP Writes) Summers is the third high-level member of Obama's economic team to leave in recent months, following the departure of budget director Peter Orszag and
Monday, September 20, 2010
Genetically Modified Salmon? Aqua Bounty Technologies (ABTX)
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| Source: eatocracy.cnn.com |
If the FDA approves their sale, they will be the first animal to be sold in the united states which has been genetically engineered.
(EatOcracy writes) The United States' Food and Drug Administration is in the midst of public hearingsto determine if it will approve AquaBounty Technologies' application for fish spawned from genetically engineered salmon eggs to be allowed for use as food. These "AquAdvantage®
All Signs Point To Overbought (SPY)
Welcome to another week of shenanigans! WE came in with a nice head fake this morning, only to have (if you were short) your face ripped off by one hell of a buy program triggered on the back of the daily mutual fund/retail brokerage ramp hour...
The market is currently up 1.5% on meager volume. We are breaking highs almost back up to the 1140 level in the ES. Seems like this perma bid is not going to leave anytime soon, might as well trade with it no matter how much i do not agree.
Market conditions are screaming overbought, but as we all know oscillators and lower indicators can remain "wrong" for quite sometime. As of August 10th 86% of stocks were above their 20 day MA, today the number is nearing 90%. The 10 day ADR is approaching overbought which is 2.0, this as volume is as low as it was during Xmas of 2009. We could move higher to the upside nearing 1150 as that is the next stop to the upside. Last time we were trading with a 1150 handle is in early May. Yearly ES high is 1216.75.
Friday, September 17, 2010
Trade Like A Floor Trader With Brian Bottarelli
Thursday, September 16, 2010
Is Chesapeake Energy Heading Trouble? (CHK)
Anyway CNBC put out an article this morning highlighting CHK's hedging strategy, which involves selling long dates call options on natural gas futures, some 70,000 of them. They are betting on the price of natural gas staying under 8 dollars through 2013 and 2020. They could be setting up for a huge pounding if nat gas spikes..
(CNBC's Net Net writes) Chesapeake Energy, one of the country’s largest gas producers, boasts that its “offensive” hedging strategies have created more than $5 billion in gains in the last decade. But as it piles on longer-dated bets on gas prices, juicing short-term cash supplies and potentially curbing future profits from rising prices, some analysts and investors have grown concerned.
Options Whisper Recommends Ford Trade - Now Up 650% (F)
The Benzinga Option Whisper has had amazing success this month. Back on August 2nd, the Option Whisper recommended buying Ford (NYSE: F) 12 calls for 26. Those subscribers who followed the Option Whisper'ssuggestion have seen a return of 650% today.
According to Option Whisper, "We recommended [this] trade idea on the thesis that Ford is the strongest automaker in the US, and is ripe for an oversold bounce. The target is in the 12.75 area"
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