Friday, August 30, 2013

 

Washed Out- Feel It All Around

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Thursday, August 29, 2013

 

Every day, another flash crash

The bad news: By one count, we are seeing three mini flash crashes in individual stocks every day, meaning an unusual 3% or greater price move that reverses within seconds. Sometimes the mispriced trades that result are voided; other times, investors on the wrong side of those trades get burned. 
And with somewhere between 40% and 60% of all stock trades now executed by high-speed computers, the reality is that "Flash Crash II" could happen at any moment. "The conditions that were behind the flash crash have not changed, and we're just as vulnerable to that happening again," says Michael Wellman, an HFT expert and computer science professor at the University of Michigan. 
High frequency trading, though, isn't just about computer systems working quickly. HFT traders, the experts say, can also use their systems to manipulate stocks – for example, flooding the market with orders to create a price move that helps them and hurts the person on the other side of that trade. 
That person could be you.  [Emphasis added.]
... 
On May 17, in the final seconds of the trading day, a big sell order hit the market for Anadarko Petroleum(APC). 
Back in the old days, a market "specialist" on the floor of the New York Stock Exchange might have worked the sale into his standing order book, with a slow and contained price decline. Now, though, HFT traders often are "the market." And they don't hang around long when there's a sign of potential trouble, such as a big sell order hitting the market. 
So when the large Anadarko Petroleum sell order hit, HFT traders bolted, bids for the stock dried up, and shares fell from $90 each to a penny in 45 milliseconds, says Hunsader of Nanex. 
"This is what's going on all the time in the market," he says. "We've lost the diversity in the market and ended up with machines that only care about speed. They don't care about being smart. They all kind of react the same way, which sets us up for sudden flash crash events." 

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Wednesday, August 28, 2013

 

Is American prosperity a historical blip?

Yes.

No.

Tuesday, August 27, 2013

 

This is why I quit trading II

Thanks to high frequency trading, as I have said before, human beings no longer make markets.  I think this is a major systemic weakness.  

As one of their trademark order-depth chart (above) shows — click here for detailed instructions on how to read it — orders to buy around 10,000 E-Mini contracts chased the market higher only to disappear without being executed. That’s not the only strange thing, they said in a blog post. Right before consumer confidence data at 10 a.m. Eastern, liquidity evaporated rapidly. 
Were the phenomenon unrelated? It’s not clear, but Nanex said the incident was reminiscent of case brought by the Commodity Futures Trading Commission case against Panther Energy Trading in July. The agency ordered the firm and its principal, Michael J. Coscia, to pay $2.8 million in penalties and banned them for trading for one year for “spoofing” in numerous commodity futures contracts. 
Spoofing is the practice of  using a computer algorithm to place and then immediately cancel potentially thousands of bids and offers. Critics charge HFT firms use the practice to fake out traders.

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Monday, August 26, 2013

 

Dr. Eben Alexander on Near-Death Experience Science

Sam Harris: …There’s nothing to debate either. He can’t reasonably claim that the relevant parts of his brain (not just the cortex) were “completely shut down.” It’s just not a factual statement.
Eben Alexander: Of course, it was premature for him to speak out based on the  Newsweek article — he needs to at least read the book if he wants to avoid making embarrassing statements that he later regrets. Isolated preservation of cortical regions might have explained some elements of my experience, but certainly not the overall odyssey of rich experiential tapestry. The severity of my meningitis and its refractoriness to therapy for a week should have eliminated all but the most rudimentary of conscious experiences: peripheral white blood cell [WBC] count over 27,000 per mm3, 31 percent bands with toxic granulations, CSF WBC count over 4,300 per mm3, CSF glucose down to 1.0 mg/dl (normally 60-80, may drop down to ~ 20 in severe meningitis), CSF protein 1,340 mg/dl, diffuse meningeal involvement and widespread blurring of the gray-white junction, diffuse edema, with associated brain abnormalities revealed on my enhanced CT scan, and neurological exams showing severe alterations in cortical function (from posturing to no response to noxious stimuli, florid papilledema, and dysfunction of extraocular motility [no doll's eyes, pupils fixed], indicative of brainstem damage).  Going from symptom onset to coma within 3 hours is a very dire prognostic sign, conferring 90% mortality at the very beginning, which only worsened over the week. No physician who knows anything about meningitis will just “blow off” the fact that I was deathly ill in every sense of the word, and that my neocortex was absolutely hammered. Anyone who simply concludes that “since I did so well I could not have been that sick” is begging the question, and knows nothing whatsoever about severe bacterial meningitis.
I invite the skeptical doctors to show me a case remotely similar to mine. My physicians, and their consultants at UVA, Bowman Gray-Wake Forest, Duke, Harvard, Stanford and beyond were astonished that I recovered.

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Saturday, August 24, 2013

 

Ben Affleck is Batman has replaced Who is John Galt?

The book's opening line "Who is John Galt?" becomes an expression of helplessness and despair at the current state of the novel's fictionalized world

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Friday, August 23, 2013

 

Good chance we could see a rally in the stock market

No market moves in a straight line.  The axiom I learned is that it is the job of the stock market to keep you out when it is rising and keep you in when it is falling.  That means sharp corrections against the main trend especially at the beginning of a new trend.  If the up trend which began in March 2009 is over then we will see some big moves up that don't take out the old highs.  (Kind of the definition of a falling market: lower lows and lower highs.)  Well patterns are starting to look like we might see one of these corrections soon.*





*I go to Daneric's blog for my Elliott Wave counts because he is really good.  I don't often disagree with him but if I do I would say.  In this case I think his count is spot on.  Elliott wave is subjective but not without worth.  There are clear rules about count waves which make vastly different wave counts between individuals unlikely.

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Foals - Inhaler

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Tuesday, August 20, 2013

 

PS4: Everything We Know

The fourth PlayStation is out this fall. PlayStation #4. Pl4St4tion. PlayStation: The Fourth of Its Name.

Sony has talked quite a bit about their next console, and although we don't know everything there is to know about the Pee-Ess-Four, we do know quite a bit. We're rounding it all up for you right here—keep this page bookmarked, 'cause we'll be updating it regularly over the next few months.

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Monday, August 19, 2013

 

Millennials in the Workplace Training Video

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Sunday, August 18, 2013

 

Feds Publicly Execute Illegal Land Rover In Baltimore

The Feds released this photo of them crushing the 4x4, perhaps just to taunt American Land Rover fans. It's like a public execution.
Do they have no decency?  

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Friday, August 16, 2013

 

Grouplove - Itchin' on a Photograph

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Thursday, August 15, 2013

 

Chart of the Day: 10 Year Treasury Yields from 1962 to July of this year

I added in a trend line going back to 1995ish and another that is just a few years old.  A move above 4% would break these trend lines and signal a period of higher interest rates.  My guess this will be a result of high debt but the long term will be driven, I hope, by economic growth.  I really don't think inflation or hyperinflation is a risk.

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Wednesday, August 14, 2013

 

Hindenburg Omen cluster/Robert Prechter on Debt and Deflation vs. Hyperinflation

Here is a video interview of Robert Prechter talking about how massive debts will produce deflationary outcomes and that the fear of hyperinflation is oversold.

And we have had 5 Hindenburg Omens over the last seven trading sessions which might be a record.  The larger the cluster of this indicator being triggered the more likely we are to see some kind of sell off in the market.

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Monday, August 12, 2013

 

Will Mom and Pop investors blow it again?

As I mentioned earlier, by definition every stock must be held by someone. So when Mom and Pop buy stocks, they must buy them from someone else, and when they sell them, they must sell them to someone else. Let’s call those other parties “X.” The market rises, Mom and Pop want in, so they buy stocks from X. The market tanks again, and they rush to sell. X buys the stock back.What we know is that X is timing the market, and he or she is making an absolute fortune. That’s because while Mom and Pop keep buying high and selling low, X manages to buy low and sell high, simply by trading with Mom and Pop.As I mentioned above, over 20 years, the average investor with $100,000 missed out on two-thirds of his profits. He should have made $384,000, and instead only made $130,000. What happened to that extra $254,000? It went to X, of course.I can’t read the future, any more than anyone else can. But I know that Mom and Pop have a terrible track record. Over the years, you could have made a fortune just by buying stocks when Mom and Pop sold them and selling when they were buying. And they are buying, heavily, right now. [Emphasis added.]

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Privilege




The report indicates that these executives work primarily in Washington, D.C., but live elsewhere, and fly to Washington routinely. In 2011 and 2012, twelve IRS executives spent over 200 days traveling each year; in some cases, the number of travel days they logged actually exceeded the number of business days in the calendar because they remained in “travel status” on weekends and holidays. 
An IRS source tells National Review Online at least two of the executives commuting to D.C. by plane work at the highest echelons of the agency. They include Beth Tucker, one of two deputy commissioners, and Laurel Cummings, the director of compliance strategy and policy for the Affordable Care Act. Both live in Texas but work primarily in Washington, D.C. Tucker reports directly to the IRS commissioner and Cummings reports to Sarah Hall Ingram, the director of the IRS office responsible for the implementation of the Affordable Care Act. 

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Saturday, August 10, 2013

 

America on vacation: The New Normal

More than 39.7 million visitors came here in 2012, a record. But those visitors spent notably less money per trip than during the last upturn — $1,021 per visit last year, compared with $1,318 spent by each of the 39.2 million visitors in 2007, according to the Las Vegas Convention and Visitors Authority — a sobering asterisk that has led many analysts to conclude that this high-rolling city is entering a less prosperous era.The total revenue from gambling and entertainment other than gambling was $15.3 billion in 2012, $500 million less than was spent in 2007.“The Strip is absolutely packed, downtown is packed,” said David G. Schwartz, the director of the Center for Gaming Research at the University of Nevada, Las Vegas. “People are here. But they aren’t spending as much as they used to.”
Less spending and less time.

 We have been vociferous in the exposure of facts about the 'quality' versus 'quantity' of jobs in the 'recovery' but there is another sentiment-sapping angle to the employment environment in the US. As Bloomberg's Rich Yamarone notes, the number of people with a job that were not at work in June or July because they were on vacation fell to 11.2 million this year from 11.59 million a year ago, a far cry from the 13.5 million vacationers in 2008 just prior to the Great Recession. Workers may be too uneasy with their situations to take off and enjoy the summer. Perhaps the need for a living real disposable personal income has kept them at their desks longer this year. 

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Friday, August 09, 2013

 

New Politics - Harlem

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Thursday, August 08, 2013

 

GET OUT!!!



Sometimes the stock market gives off signals of impending doom that are so strong you can't believe it.  If you spend enough time watching the market you know there a moments when the market screams buy me or sell and run.  Like perfect waves for surfers, there are perfect waves in all markets that force you to scramble to catch them.  You are tempted to sit back and watch.  Really tempted.  Because something like this doesn't happen so often and you can get tired waiting.  You ask yourself if you trust your instincts and, if you do, you have to act.

This is what I am seeing.

1)  Another Hindenberg Omen occurring after several over the past 6 weeks.

2)  Several trend lines are in danger.  I will show this in charts some time this week. I am beat, its been a rough week.

3)  It's August.  Always a good time to sell.  (Actually May is the best.)

4)  Interest rates have risen quickly and they haven't come down.  JUST LIKE 1987.  Maybe this is hyperbole but I can't think of a time when a bear market in treasuries would be scarier for the economy.

My advice from July 2nd still holds.  And you know that these points can occur and bare no fruit.  The good thing about years of experience is that you don't get these moments very often and yourself calling wrong usually happens pretty quickly.

Update:

Another Hindenburg Omen today.  That is 4 in the past 5 days.

Short term and long term Elliott wave count on the S&P 500 is rolling over and very toptpy, respectively.

Something big will happen in the next couple of weeks.  It looks to be down right now but a couple of hundred points up in the Dow negates the short term negativity.  In fact, the stock market almost has to sell off big next week given all of the negative wave patterns, technical indicators, and seasonality.

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Friday, August 02, 2013

 

Fiona Apple - Werewolf

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