Aug

14

 Until this week's news vacuum for the Olympics and Euro Vacations, in the last two months SNP 500 cash market has had a wave like behavior. Of course, the SNP futures trade all night in low liquidity and are influenced by overseas currencies and markets. Futures prices are more volatile and spotty than the cash daily, open hi low close levels.

If I was a conspiracy nut, I would think insiders know the news and influence the news hopper timing. It's easy to see how the HFT crowd with quick news reading machines jump to bid or offer the markets for an hour. At first I thought how easy it would be to have a buddy writing the news headlines, or drop a fed/ecb easy money story at my time and trade the futures by front running HFT, that is front running the shorts covering.

After looking at the cash charts, Oh my gauche, talk about making some real money. The billions that could be put to work in the cash markets on the big down for 4 days in a row, a small day in between, then rip it back up over a few days. It rallied just enough over the last rally highs, say 7-11 points or a whole percent this time to unload a massive inventory. (Especially easy as everyone remembers what happened last year at this time. We had the declines, but this time we get the fed/ecb news hopper rallies.)

It's not so much the Surfer Sogi's waves never happened before in markets past. It's more about the number of days and the way we rally, or magnitudes/time. The 4-5 downs in a row and the 2-3 fast ups, then straight back down, notice the magnitude! In SNP futures, I didn't catch on. Yet the cash markets look like some electronic or electromagnetic type wave. Could that be a computer model? Humans do not seem to be so passive and so aggressive so many times in a row. After all we seem to learn from our mistakes, right?

Okay, I have no idea what I am talking about in electromagnetic radiation waves or computer models for trading. Yet I see 'near field' with hft and news. Then, no action news black outs is the far fields, the wave patterns this week.

Not only were the magnitudes of the declines and rallies similar, the durations were similar to this wave pattern . vs 2 month SNP cash charts.

Give me 20 minutes and I'll come up with anything more fun than "markets rally on Fed Easing hopes", "markets decline because there might be a problem with the Euro banks", over, and over again.


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