The Market IS Manipulated

[wayneL]

Yup, Larry Levin let the cat out of the bag the other day. Larry ain't no bobblehead, he is someone who should know:

"Larry Levin is a professional futures trader. He has been in and around the S&P 500 futures pit at the largest futures exchange in the world; the Chicago Mercantile Exchange (CME), for almost 20 years.
Larry has been trading his own account or company's proprietary accounts since 1993, trading an average of 2500-3000 E-mini S&P futures contracts a day."

Check out the video @ http://sigmaoptions.blogspot.com/2009/07/market-manipulated-levin-lets-cat-out.html (sorry, can't embed CNBC videos on forums)

Anyone want to dis the PPT now?

 

[wayneL]

Here's another one on market manipultiond by Joe Saluzzi today on Gloomberg.

* 60-70% of current volume is fictitious and dominated by program trading. The guts of it is about 3:50 in

 

[Sean K]

I can't view/hear because my soundcard is kaput.

But, if it IS manipulated, why did the manipulators allow the market to tank 50%? I assume they were short?

 

[wayneL]

I can't view/hear because my soundcard is kaput.

But, if it IS manipulated, why did the manipulators allow the market to tank 50%? I assume they were short?

I don't know, but these guys have more credibility than I will have in a 1000 lifetimes. It would be interesting to get that answer from them.

My guess is it took some time for the Obamanomic bastardized Keynesian programs to kick in.

 

[Sean K]

I don't know, but these guys have more credibility than I will have in a 1000 lifetimes. It would be interesting to get that answer from them.

My guess is it took some time for the Obamanomic bastardized Keynesian programs to kick in.

Maybe it's manipulation up to a certain point before mass hysteria forces it out of control in those (rare) cases.

 

[wayneL]

Maybe it's manipulation up to a certain point before mass hysteria forces it out of control in those (rare) cases.

I think that's a pretty good hypothesis.

 

[peter2]

Saluzzi's distinction between volume and liquidity was interesting. They are many examples of this in the ASX at the moment and during the recent market rally. I trade stocks showing high volume with a value traded/day cutoff. You would think that slippage would be minimal trading high vol stocks and placing stops outside the normal daily volatility would be fairly safe. Not so. The market depth on many stocks is still very thin even though the daily volume is quite high.
This is an example of a stock with thin market depth even though on some days 1 million shares can be traded. What would happen if the institutional players involved with this stock stopped playing? The current playing level is 71-72.

 

[tech/a]

Makes sence.

Huge pit of money players distributing it around the pit.

 

[jonojpsg]

Saluzzi's distinction between volume and liquidity was interesting. They are many examples of this in the ASX at the moment and during the recent market rally. I trade stocks showing high volume with a value traded/day cutoff. You would think that slippage would be minimal trading high vol stocks and placing stops outside the normal daily volatility would be fairly safe. Not so. The market depth on many stocks is still very thin even though the daily volume is quite high.
This is an example of a stock with thin market depth even though on some days 1 million shares can be traded. What would happen if the institutional players involved with this stock stopped playing? The current playing level is 71-72.

The thin market depth is understandable though given current uncertainties about where the market is heading - it's not really the sort of climate which makes people line up four or five rungs down the list since if the market chucks a wobbly again for whatever reason, the sellers are gonna jump back in and you'll be able to pick up a bargain. If you want to get in though, well those are the ones picking off a cent or two because it's a buyers market.

 

[xyzedarteerf]

i have always thought of this when i started trading but you know what , i accepted that the market is manipulated its just how it is.
BOT trades... you see it happening every trading day S**'s a perfect example same buying volume passing at exact time intervals.

 

[nunthewiser]

the ASX definately is .......... see it on a daily basis ............ even heard a story down the pub once of some dude pushing and pulling a low volume stock on occasion for entrys and exits alike

watch the daily depths of numerous stocks out there - capping a stock , pumping a stock , scaring a stock etc etc etc etc

all part of the game they say

 

[Agentm]

thank you wayne

both links are spot on to how i view the planet..

nice to see others are thinking it through..

 

[beamstas]

I watched this on bloomberg the other morning
I agreed once i understood it
Made sence to me

 

[prawn_86]

It's "sense" people. Note the S, not C

 

[nunthewiser]

It's "sense" people. Note the S, not C

yeah ......what he said

 

[johnnyg]

How much of an emphasis do you guys put on liquidity and actual market depth before placing a trade?

Say you see a good setup on your charts, and volume looks good, however when you go to place your order and check out the Market depth you see something similar to what peter2 has highlighted.

Do you cancel your trade and move onto the next one? Does it happen often?

 

[Sean K]

How much of an emphasis do you guys put on liquidity and actual market depth before placing a trade?

The smaller the depth and lower the liquidity the greater the potential gains.

And losses.

If you find a truly undervalued low cap stock, the skye is your oyster. Whatever that means.

This is 'investing'.

Off topic...

 

[gfresh]

Anybody who has watched the market depth for more than 5 minutes would see there is always games at work. Nothing there in the ask que and then suddenly chock full, only to be gone a few seconds later, stock rises, chock the bid que.. sell gradually.. remove bids.. let price fall. And other similar tricks.

Some of it is human controlled, but a lot of it obviously isn't.. just programmed to wait for specific times, and specific conditions.

Control enough of it, and have deep enough pockets and it's probably not too difficult to move the markets easily enough.

 

[lasty]

Anybody who has watched the market depth for more than 5 minutes would see there is always games at work. Nothing there in the ask que and then suddenly chock full, only to be gone a few seconds later, stock rises, chock the bid que.. sell gradually.. remove bids.. let price fall. And other similar tricks.

Some of it is human controlled, but a lot of it obviously isn't.. just programmed to wait for specific times, and specific conditions.

Control enough of it, and have deep enough pockets and it's probably not too difficult to move the markets easily enough.

Well yes... All markets are manipulated in one or other...
Here is an interesting read on the bigger picture
http://www.rollingstone.com/politics/story/29127316/the_great_american_bubble_machine/1

 

[Dowdy]

The biggest manipulator of the market is the government