Just another day @ the FED

[Jim Nickerson]

Re: Just another day @ the FED

To me it appears that the data servers that were supplying data to these people had a glitch, and they had missing data points, with only the start point and the end data point available. The charting software then appears to have filled the data by linear interpolation.

I have seen these kinds of data feed glitches on real time feeds -- generally not on trading platforms -- but even there, it happened to me a few times, and I had to get in or out of a position using the phone. This was when trading S&P mini futures. But I have not done that trading in over six years. So, I do not know how that data feeds have changed during that time -- Just observing Yahoo data feeds, I have seen this sort of behavior occurring with increasing frequency these last few weeks.

So far, Rajiv, what you are suggesting makes more sense to me than anything else put up to explain the near-symmetry in movement of those two charts of bart's.

For those suggesting that the charts are apparently sure signs of "intervention" on the part of some governmental entity if one is experienced at looking at futures charts, I think the onus is on them to prove what you, Rajiv, suggested is wrong.

This might be an instance of where a "picture is not worth a thousand words" in that pictures can lie.

EDIT: and if you, Rajiv, are correct, it would also make metalman correct that the charts are "machine driven," but not in the sense of some program trading computer.

[Rajiv]

Re: Just another day @ the FED

I am sure that the monetary deflation is hitting everybody, and data suppliers may be cutting costs, laying off people, and other miscellaneous things one does when one is faced with hard times -- So I presume and expect that there may be a loss of service as things breakdown, and take longer to repair and bring back up because of a lack of resources.

[Jim Nickerson]

Re: Just another day @ the FED

Here is another novice's question which perhaps if answered by some knowledgeable person will serve to educate me and any who happen to be of my ilk when it comes to knowing about futures stuff.

The SPX is driven by people and entities buying and selling the stocks that comprise the SPX. Futures as I understand are "bets" on where the market may be at some point in the future (I guess that is self-evident). If some entitity "intervenes" in the futures market how does that effect the immediate direction of how the SPX is moving?

[bart]

Re: Just another day @ the FED

So far, Rajiv, what you are suggesting makes more sense to me than anything else put up to explain the near-symmetry in movement of those two charts of bart's.

For those suggesting that the charts are apparently sure signs of "intervention" on the part of some governmental entity if one is experienced at looking at futures charts, I think the onus is on them to prove what you, Rajiv, suggested is wrong.

This might be an instance of where a "picture is not worth a thousand words" in that pictures can lie.

EDIT: and if you, Rajiv, are correct, it would also make metalman correct that the charts are "machine driven," but not in the sense of some program trading computer.

I submit that the burden is not on anyone. If you believe intervention or manipulation didn't occur yesterday or is generally impossible or quite unlikely, its your right.

I refuse to defend those charts, or anything about behind the scenes activities represented by them and many other charts etc., including actual NYSE program trading charts.
Some people just don't believe it can or does occur, regardless of decades of evidence or how many facts or links I have... and it's fine with me, as long as I don't get attacked for my opinions.
I do quite ok in my trading using charts and data like them.

As for me, the facts are quite clear and even Mish's chart (post #30) shows a similar pattern to those two charts, while he asserts that it couldn't be intervention or manipulation... much like he denied and danced around the actual facts and proof of ESF intervention way back in June or July.

[laphroaig]

Re: Just another day @ the FED

I agree that the linear graph is very odd, and calls out for an explanation.

What I don't understand is how anyone (government entity or otherwise) could intervene in an actively traded market, with the result being a steady linear increase in the price.

Sure, I can buy a fixed amount of units of the index every minute, but the activity of all the other traders in the market will be overlayed on top of this, and so the overall resulting price action in the market won't show a linear increase.

To create a linear increase in an actively traded market, I need to know what all the other market participants are doing, and adjust my buying to compensate for that in order to create the overall result of a steady linear increase. Maybe a computer-based trading system could gather the feedback from the market and buy/sell quickly enough to create this effect, but I have to ask why would anyone want to go to the trouble to do this?

The only other explanation for a steady linear increase resulting from an intervention is that all the other market participants stopped trading while the intervention was happening. That also seems pretty unlikely.

[bart]

Re: Just another day @ the FED

Here is another novice's question which perhaps if answered by some knowledgeable person will serve to educate me and any who happen to be of my ilk when it comes to knowing about futures stuff.

The SPX is driven by people and entities buying and selling the stocks that comprise the SPX. Futures as I understand are "bets" on where the market may be at some point in the future (I guess that is self-evident). If some entitity "intervenes" in the futures market how does that effect the immediate direction of how the SPX is moving?

There's nothing magic about futures - supply and demand works there just like anyplace else. If there are more buyers than sellers, the price goes up.

Its just like betting or gambling on a stock or ETF or mutual fund - if some entity "intervenes"and buys a lot of a stock or whatever (and all else stays similar), the price goes up.
If some entity "intervenes" and does a lot of naked shorting with fake stock shares, the price goes down.

[Rajiv]

Re: Just another day @ the FED

Bart,
As you well know, I am not denying intervention and/or market manipulation -- for I believe that these take place, and are indeed taking place -- This is well evidenced by my Failure to Deliver posts. However, the straight line changes you showed in the graph are more likely a sign of data server failure, and a consequent data interpolation by the charting software.

That said, the steepness of the rise in the last two hours -- in a thin market definitely smacks of market manipulation -- especially since it is followed the next day by steep drops!

[Jim Nickerson]

Re: Just another day @ the FED

I submit that the burden is not on anyone. If you believe intervention or manipulation didn't occur yesterday or is generally impossible or quite unlikely, its your right.

I refuse to defend those charts, or anything about behind the scenes activities represented by them and many other charts etc., including actual NYSE program trading charts.
Some people just don't believe it can or does occur, regardless of decades of evidence or how many facts or links I have... and it's fine with me, as long as I don't get attacked for my opinions.
I do quite ok in my trading using charts and data like them.

As for me, the facts are quite clear and even Mish's chart (post #30) shows a similar pattern to those two charts, while he asserts that it couldn't be intervention or manipulation... much like he denied and danced around the actual facts and proof of ESF intervention way back in June or July.

bart, you are coming across a bit thin-skinned about this. I am not attacking anything you have to write about this, because you know I don't know enough to do that. I don't personally give a shit whether or not "intervention" occurred yesterday.

What does seem worthy of explanation by anyone who might possess one that would in fact approaches the truth, if such exists, is what could possibly make a chart behave the way those two charts appear?

So far, for my monopoly money, Rajiv's explanation makes the most sense to me.

Still a question: how does any "intervention" in the futures market of the SP-500 affect the actual real-time pricing of the SPX?

I think for the sake of discussion if piffle thinks those charts "clearly shows intervention" then he should refute Rajiv's explanation. piffle is in Australia sleeping I hope.

[bart]

Re: Just another day @ the FED

Bart,
As you well know, I am not denying intervention and/or market manipulation -- for I believe that these take place, and are indeed taking place -- This is well evidenced by my Failure to Deliver posts. However, the straight line changes you showed in the graph are more likely a sign of data server failure, and a consequent data interpolation by the charting software.

That said, the steepness of the rise in the last two hours -- in a thin market definitely smacks of market manipulation -- especially since it is followed the next day by steep drops!

Fair enough, but I also ask you to consider that the chart is denominated in a different currency and also that it is not perfectly filled in - there are random minutes where the market was slightly down.

[Rajiv]

Re: Just another day @ the FED

Jim,

You are asking a question that is very relevant as to how market manipulation is often performed. The S&P Index Futures are likely one of the favoured ways of doing so.

First, realize that Futures are a leveraged entity. From Investopedia

Index futures can be used to hedge existing equity positions or even to speculate on the movement of an index. Gains and losses will be relatively large compared to index ETF's that trade on the stock exchanges due to the fact that the leverage in a futures contract is very large. For example, one S&P500 futures contract is valued at 250 times the index price. Assume the S&P is trading at 1300, this would render one contract to be valued at $325,000 and can be purchased for a fraction of that number.

Typically, You deposit a sum of money with the broker, and then you buy or sell a future. However, if your cash position drops below a certain limit, the broker can do a forced liquidation on your positions.

I will typically buy a futures contract if I expect the market to go up, and I will sell a futures contract if I expect the market to drop.

But what is my broker (marketmaker) going to do? Remember that he/she has to be ready to do a forced liquidation on your positions.

If you buy a futures contract, he/she has to be able to execute the futures contract on the expiry date -- that means that he/she has to have the cash to do that -- since he/she has to make the assumption that at some time they will have to do a forced liquidation of your position, and that the will be stuck with the contract. So thay will sell the index to get that cash when you buy a futures contract -- similarly they will buy the index when you sell a contract. So because of the 250X leverage, buying or selling of a futures contract can have a large effect on the market.

[bart]

Re: Just another day @ the FED

bart, you are coming across a bit thin-skinned about this. I am not attacking anything you have to write about this, because you know I don't know enough to do that. I don't personally give a shit whether or not "intervention" occurred yesterday.

What does seem worthy of explanation by anyone who might possess one that would in fact approaches the truth, if such exists, is what could possibly make a chart behave the way those two charts appear?

So far, for my monopoly money, Rajiv's explanation makes the most sense to me.

Still a question: how does any "intervention" in the futures market of the SP-500 affect the actual real-time pricing of the SPX?

I think for the sake of discussion if piffle thinks those charts "clearly shows intervention" then he should refute Rajiv's explanation. piffle is in Australia sleeping I hope.

I beg to differ, and most strenuously reject your assertion about being thin skinned. We've been here before Jim, and your comment about not giving a shit about it being or not being intervention is belied by the amount of times you've posted in the area.

I've taken extreme pains to precisely answer any and all of your questions to the best of my ability, as I have done before with things like TIO intervention etc. I've probably answered at least 10 of your posts/questions just on this thread.

You still question and have not clearly admitted that its probable or at least possible evidence of intervention or manipulation, just as you have to the best of my knowledge rejected any other evidence of intervention that I have presented (like TIOs). I submit that it is you who will not deal with the facts as they exist or with evidence of intervention and manipulation and behind the scenes actions over the decades.

As far as your question about the relationship of the cash & futures market, are you denying that they affect each other deeply? And yes, that's a rhetorical question.

Its also a question that could easily be the subject of a PhD dissertation, and I suggest that you do some independent research in the area if you're still curious. My opinion is what you would expect - futures can be and are used to affect and manipulate the stock and other markets. It's not right, I don't agree with it - but it happens, and Rajiv generally agrees. Whether you believe it or not, or whether you think those charts are evidence of it or not (including the chart from Mish), is up to you.

[laphroaig]

Re: Just another day @ the FED

Still a question: how does any "intervention" in the futures market of the SP-500 affect the actual real-time pricing of the SPX?

Any significant differential between the future price and the current price creates an arbitrage opportunity.

If I can buy today at 850, and simultaneously sign a contract (on the futures market) to sell next week at 900, then I can make a guaranteed return on my money.

Hence if the S&P future price moves up substantially, the S&P itself will tend to follow pretty closely.

[Jim Nickerson]

Re: Just another day @ the FED

I beg to differ, and most strenuously reject your assertion about being thin skinned. We've been here before Jim.

I've taken extreme pains to precisely answer any and all of your questions to the best of my ability, as I have done before with things like TIO intervention etc. I've probably answered about 10 of your posts/questions just on this thread.

You still question and have not clearly admitted that its probable or at least possible evidence of intervention or manipulation, just as you have to the best of my knowledge rejected any other evidence of intervention that I have presented (like TIOs). I submit that it is you who will not deal with the facts as they exist or with evidence of intervention and manipulation and behind the scenes actions over the decades.

As far as your question about the relationship of the cash & futures market, are you denying that they affect each other deeply? And yes, that's a rhetorical question.

Its also a question that could easily be the subject of a PhD dissertation, and I suggest that you do some independent research in the area if you're still curious. My opinion is what you would expect - futures can be and are used to affect and manipulate the stock and other markets. It's not right, I don't agree with it - but it happens, and Rajiv generally agrees. Whether you believe it or not, or whether you think those charts are evidence of it or not (including the chart from Mish), is up to you.

Thanks, bart and Rajiv, for the time to put up your explanations and the explanations.

[sunskyfan]

Re: Just another day @ the FED

This is not a "Face on Mars" phenomena. If somes chart which shows the standards noise of the market followed by a systematic linear increase either the chart creator knows something or their is something else "wrong".

[bart]

Re: Just another day @ the FED

Thanks, bart and Rajiv, for the time to put up your explanations and the explanations.

You're most welcome Jim. Hope it helped at least a little.