Dec

24

1. The move in the 10 minutes before the announcement from 1440 to 1428 was flexionic. Who had the inside information that an announcement that the vote on plan b was canceled and that it would be announced, and who acted on it? Let us hope that the authorities will be as vigilant in uncovering inside trading on this legislative announcement as they are on infractions about corporate events.

2. The move from 1428 to 1390 in 1 minute shows the danger of leaving limit orders on a scale down or up when algo can move 50 points and margin must be maintained at all times. The advice of good chess players to stall is paramount.

3. The other markets like bonds did not catch up until 800 am the next day, showing the tendency to underestimate change, and the cascading effect of one market on the other.

4. What a field day the brokers who can trade against their clients must have had. In the old days it was considered illegal to run the stops of your clients and take positions on the other side in certain markets. Why not today? Give the public the illusion of a level playing field

5. As always, the public will be behind the form. And no one will put in limit orders a few points below or above the market overnight for a while, and that will be the strategy with the highest expectation if you have things set so that you are not susceptible to gamblers ruin or top feeders and institutions who have no capital worries because of ability to borrow from the cb's et al bluffing you out into oblivion.

6. Volume will decrease as all the weak hands lick their wounds, and circle the wagons to preclude it happening again.

7. The moves preceding the flash crash in bonds and gold and the ratios augured the likelihood of such a free fall.

8. The wisdom of acting on the rumor and taking profits on the rumor was underlined. Or as they say in board games, "the threat is worse than the execution."

9. Old man river, the drift in the market, is paramount. And those in index funds, and those who buy and hold, and those who live in stately mansions waiting to take out their canes or specializing in panics were able as always to deposit the overplus in blue chip 5th avenue properties.

10. Will it be a lobogola or a finnegan. I say a lobogola. But it has to be tested.

What did you learn that I have not covered?

p.s.  Note that this little "night squall" (as opposed to "flash crash") had to happen just before a holiday-weekend period when many players would be looking to lighten up anyway, so they can relax and watch the kids open their presents.

Anonymous writes: 

Was there a political reason the flush came just after 8pm (such as timing of the expected vote) or is it not coincidence that the flush occurred just after electronic trading closed in US Equities, leaving participants stuck overnight with positions (not to say there is much liquidity at that time; and if I were running the show I'd have released the information at 19:55 with bids lower across the board just above erroneous trade limitations). Maybe it was a favor. 


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