I wondered on Thursday’s price plunge in “Stock Bellies”, “where the hell is the
“Plunge Protection Team” [PPT]? … and as the day progressed and they were
nowhere to be found, and the selling intensified, 2 things came to mind … 1) the
PPT isn’t there to “sop up” selling, it’s there to punish the living shit out of those
who are either short, or have sold their positions in equities [derivatives, cash,
whatever], and make them pay dearly for their bearishness, cuz getting back in
long at a decent price is gonna be a B.I. Itch … 2) maybe the FED faculty lounge
Lizards know the NFP is gonna be a “nothingburger” the next day, and the
market will self correct upwards then, so why come in now? … but the market
[“Stonks”] never rallied on its own and the trading algorithm never got into
“buy mode” on Thursday.
That’s what led to me thinking the NFP just might be “blah blah, yada yada” and
so time to move on … then comes the sigma miss to the upside and all hell
breaks loose … ZH said the PPT hadn’t been this forceful to the upside, since
the 2011 Greek Crisis [Grexit] … what I know is this … in the “Spoos” [SP500] &
NDX100 Friday saw a TRIPLE REVERSAL ON SIZE & VOLUME … came close in
the DOW30 but that second low reversal never came … close but no cigar … and
since I’ve been around trading since the “Spoos” came on the board in
April 1982, I can’t ever recall seeing a TRIPLE REVERSAL of the size and scope
we saw Friday … NEVER! … I won’t go as far as saying I’m 100% sure about that,
cuz almost 39 years day-in, day-out is a very long time … but I don’t ever
remember seeing it … some DOUBLE REVERSALS yes, they come ONCE about
every 5 - 7 years, and the common denominator in all of ‘em is GOVERNMENT
… and since the crash of ‘87, that means the PPT is on duty every single
market day!
In reality, the PPT is the mechanism used by the Apparatchiks who create
volatility bottleneck problems of their own making, then “solve” the problem
via government interference & manipulation … “it’s for the children,
don’tchaknow”! … and what’s truly frightening is they think that’s perfectly OK!
… and as each passing month shows, these created problems attempting to
squelch volatility [cuz the 0.001% elitists like Bezos, Gates, & Buffett], keep
getting worse each time the “solution” is applied … let me be the first to predict
that someday it ain’t gonna work and the whole system crashes to fucking
ZERO! … probably not for a while yet, but given the Communist Dynamic Duo
in the WH, and their truly reckless economic policies of wealth distribution &
confiscation, I’d say their watch is as good as any to see it happen … maybe
when they dispatch Preezy Depends to the graveyard or “the home”, cuz that
brings the true Manchurian Candidate KH to power, and God help you then if you
live in the “U.S. of China”.
So what ends up happening now is equity derivative markets react as never
before, leaving unmistakable conclusions in its wake … 1) there are no rules
as to where markets can go or how fast they can get there … 2) liquidity in major
markets is a joke, cuz there is none … and 3) the first traders to panic buy or sell,
are the lucky ones who get to panic later, and the rest simply go back to the
“Pudding Business”!
I spent the weekend continuing work on the trading algorithm, and then vetting it
with some other traders … minor revisions and rewriting to make things clearer
to Newbies, it isn’t the simple process many think it is … I’ll bring on the results
pages for managed money next week or the week after … right now, I’m totally
focused on putting the whole package together, and it’s a lot of work … but ya,
it’ll get here shortly.
Outta here … onto the week and tomorrow … “the future’s so bright I need
sunglasses”! 😎 … Onward & Upward!!
-vegas
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