As thetrader has written about for some time, the HFT Algos have destroyed the market structure. The illusion of volume is there, only to vanish whenever a big order is to be executed. Quote stuffing predators are only slowing down the system, and have of course contributed to last year’s Flash Crash, as well as the numerous min flash crashes we have seen in individual stocks for the past year. Banning quote stuffing, would be good for the market, as the market practice creates negative value for the market. A zillion orders that come into the market, and simultaneously vanish, are definitely not creating the liquidity we would like to see. Will the big investments into algo stuffing computers prove worthless?
“U.S. prosecutors have joined regulators’ investigation into whether some high-speed traders are manipulating markets by posting and immediately canceling waves of rapid-fire orders, two officials said.
Justice Department investigators are “working closely” with the Securities and Exchange Commission to review practices “that are potentially manipulative, like quote-stuffing,” Marc Berger, chief of the Securities and Commodities Task Force at the U.S. Attorney’s Office for the Southern District of New York, said today at an event in New York.” (Bloomberg)
Is Silver to top out, or will the squeeze move the precious metal over 50 Usd? Despite two margin hikes this week, silver is very close to 50 Usd. Let us see next weeks action.
“We’re concerned because the rate of ascent in silver prices keeps accelerating,” said Mark Thomas, chief investment strategist at TheSilverShortage.com, which offers a newsletter about silver and silver mining investments. “A parabolic move like that can ruin any bull market short term.”
“We have now entered just the beginning of the third [and final] phase of the bull market in precious metals” — the phase in which everyone has become aware of the bull market but aren’t yet engaged and involved in it, he said. The third phase is far from over but when it ends, “precious metals will become a bubble with heavy public participation.” (Marketwatch)
… some interesting news crossed the tape;
- Ireland revises 2011 GDP growth to +0.8% from +1.7%; 2012 to +2.5% from 3.2%
- Irish govt revises 2013 deficit forecast to 7.2% from 5.8%; 2012 to 4.7% from 2.8%.
- Ireland revises 2011 debt/GDP forecast to 111% from 98.6%; 2012 to 116% from 102%
- DJN-DJ EU PAPER: LARGE PARTS OF BANK RESTRUCTURINGS YET TO COME
- DJN-DJ EU: “DISTINCT VULNERABILITIES REMAIN” IN EU BANK SECTOR
Another no volume day. We are told no inflation, but gold is kicking it today, up almost 2%. Another topic for the coming week is the action in JPY. When is intervention No2 coming?
“We are in the worst moment” says Rubalcaba.
The Spanish economy is not improving, despite all the PR we hear about it on mainstream media. With unemployment rate close to 22%, and almost 5 million people unemployed, we don’t see how the “inventory” of over 1 million empty apartments and houses will be sold in near future. The situation is detoriating, and with all the real estate fantasy valuation intact, the possibility of improving Spanish economy are very low. In some provinces like Andalucia, unemployment is over 30%. Remember, Spain is one of the biggest European countries….
Full article in espanol, El Pais,
Is there any market left unmanipulated?
“Goldman Sachs Group Inc., JPMorgan Chase & Co. and 14 other investment banks face a European Union antitrust probe into credit-default swaps for companies and sovereign debt.
The European Commission is investigating whether 16 bank dealers, including Citigroup Inc. and Deutsche Bank AG, colluded by giving market information to Markit, a financial information provider. Regulators will also examine whether nine of the firms struck unfair deals with ICE Clear Europe, a clearinghouse for derivatives, shutting out competitors.
“Lack of transparency in markets can lead to abusive behavior and facilitate violations of competition rules,” Joaquin Almunia, the EU’s competition commissioner, said in an e-mailed statement. “I hope our investigation will contribute to a better functioning of financial markets.” (Bloomberg)