Sunday, August 30, 2009

Citizens For Honest Markets Manifesto

We considered variety of aspects of the networks and trading, which has left no doubt that the basic principles of a the market, insiders win, is upheld. Insider can be those who possess none public information due to their positions either inside the companies or industry or market making process. That is Corporate Executive's Deep Pocketed Market researchers and Brokers Dealers. Public is SCREWED all the time, unless and until public understands how to cope with all of these factors.
Let us say Goldman tell its affiliated hedge funds that "market is a buy". You see , it does not matter if market was a buy or not. Now it is a buy, because of the power of the Goldman affiliates that start buying. You be sure that you are never told by Goldman the same thing at the same time it tells that to its affiliates and internal groups to start buying. Like you were told OIL will go to 85 when OIl was already closer to 60. You did not know that when OIL was 35 did you? Somebody did! Now, As I said already, I do not know if this criminal or not, I am not a securities lawyer, but I can sure as hell can tell you that dual role of Goldman is/should be not tailorable. Let alone the fact that they can also influence media, which hangs on every peace of (mis)information Goldman wants to put out. You remember , I described to how the market can be "RUN" by few players ganging together. What is a difference between 10 Russians ganging together and "running the market" as compared to Goldman telling 1000 of its affiliate funds and internals groups "buy the market" is not that ganging of sorts.
You see, the reason , the FREE CAPITALISM does not exist any more is that the FED and Government allow the concept of too big to fail to persist. As long as that is the case and markets are not policed with regard to the size and power a single entity/group can obtain , the FREE CAPITALISM is none existent. It is SOPITALISM. System of Government being beholden to special interests, financial , in this case.
Again, I am not a lawyer and do not pretend to speak from the position of the laws, but I sure can tell you that something is totally wrong with regulation and the laws if they allow this to persist.

And What about the aspects of technology. Since the way technology facilitates the advantages of rich over poor in the market, is not somebody, like SEC , supposed to be on the case of COLLOCATION aspects of the exchanges and the rest of NETWORK inequities?

In any case, I can only hope you as an individual investor get better ideas on how the networks and regulations and media information flow operate, to make you a better trader. None of these by themselves will make you really good trader( for that you must trade), but knowing this context creates field of knowlege that prevents you from trying to compete in places where you can not win. For example , while the cost of transactions incurred by institutions trying to compete with Goldman in trade size does not really interest you , because you are a small trader and happy to exectute your trade 1-2 cents away from precise target you want act at. You are not concerned that much with Goldman being after you becuase of your size. Yes, in total thousands of investors still lose money to Goldman, but on the individual bases that is not very improtant given the liquidity of the markets and your gain/loss depend more on your correct trade selection. You are ok with costs if you can transact for 1 dollar a trade like I do. most of the time. Another issue is news and how interpret them. In light of what I told you about the "running the markets" you should gresp easily , why you must suspect every and all news coming from the financial establishment and news media beholden to them. You should develop sense of , who cares what Goldman says, or If Goldman says that it most, likely is already positioned to take advantage of the moves described or , is actually, taking advantage of the news it has just planted!!!. If you anderstood what I just said, you are , light years ahead from where you where before you read this.

Friday, August 28, 2009

Citizens For Honest Markets Manifesto


Please ignore the Pcratio/lower part of this picture, see the second picture for PCratio update instead.

So, what does the FREE SPEACH AND HONEST MARKETS HAVE TO DO WITH EACH OTHER?
You Can Have Either/Both, As Long As You Are Rich!!!
Today we shall discuss a bit more technical aspects of trading systems and networks. Networks have been designed to support the reliability. Without such reliability Internet will be unusable for anything that looks like a transaction. For example, if one could not verify that the execution order has been received by the exchange computer, it would be very hard to proceed and do the next operation, whatever that maybe, perhaps CANCEL/REPLACE to fool the "other guy". So, in general, it takes the network basic protocols to carry the traffic and certify the delivery of the data on the most elementary level of the networks. This protocol is called TCPIP( Transmission Control Protocol for Internet). Now this basic protocol knows nothing and cares none about user traffic. It does not know about the user information such as FIX ( Financial Excuse Protocol) CANCEL command. This is similar to the railway car not knowing what is put on it to be carried ( Coal or Grains etc.) It just knows that the content must be delivered from one place to another. In the case of trading example that means delivering the message from brokers computer to exchange computer. In the collocation case, there is only one router between these two computers and that means very short time, but amazingly enough even that can be (ab)used to shorten the trading decision times. So the Goldman ( example) computer sends BUY command, Goldman's Computer encodes it into TCPIP protocol and sends it to ARCA(EXCHANGE) router. Routers do not care, as mentioned, about BUY, they just know the envelope (TCPIP) that BUY was encoded in and at the basic level they confirm the reception of the envelope. The BUY was not yet received by the Exchange Computer, but the envelope delivery was confirmed by the router to the Goldman computer. Now If Goldman Programmers were smart and had access to the underlying TCPIP stack of communications inside the operation system( say LINUX/WINDOWS) and intercept the fact of ACKnowledgement of the BUY being delivered to router, they can surmise that the BUY will very soon(milliseconds) will make it to the EXCHANGE computer. This is very reliable, therefore Goldman's trading platform may say, let us not wait before the EXCHANGE computer got the envelope from router and decoded the BUY message from the envelope and send an answer back to Goldman's Computer( via router and new TCPIP envelope of its own initiation). So, now, Goldman , can short circuit the time and send CANCEL/REPLACE order!!!
This simply means that Goldman's computer was able to place two FIX protocol commands ( BUY, CANCEL) in a manner that saved, at least, couple turnaround times for the higher level protocols. This is similar to sending somebody a letter via post office and assuming that they got it, therefore it is ok to send the next one , which is totally dependent on the context of the first one. Interesting ha? So, you ask why not send them together anyway? well this is not always possible or desirable. You may want the messages to be broken for security purposes or because the paper can not handle both messages together(: - ( you can always get more paper, but just assume that is the case with FIX protocol and it can not get two messages at once).
You see now the games people play to achieve absolute speeds of execution even when the broker computer is collocated with exchange computers. I can even imagine that there will be day when all this is hard coded into the HARDWARE and is executed at faster speed than it takes conventional computer/operating systems to delver messages between the programs and hardware that puts out the messages into the communications lines.
HUH! You see the technology? You can play a lots of expensive games if you have money!

Wednesday, August 26, 2009

Citizens For Honest Mmarkets Manifesto

Considering the tight correlations/anticorrelations in the market these days. The picture below is not just about EURO! It is about OIL, STOCKS, EURO , METALS etc. All markets of interest. All markets of great interest(:-


1027.58 1029.65 1033.01 1037.19
spx
1018.85 1016.78 1013.42 1009.24

Now, I have not yet completed much of my thought about the High Frequency Trading and all kinds of misconceptions and statements going around the net, by people who hardly understand what they are talking about, but pretend to be telling the world something new. Ok, there may be something new, here...
IT IS THE TECHNOLOGY STUPID!
Leave the technology alone and all you are left with the good old days of Jessy Liver more and his era , simply amplified and put on steroids by the modern technology and in many ways more opaque, due those facts. Only people well versed in technology and trading can tell you that there is nothing new here. It is all the same old , same old... Insider trading, front running etc... POTENTIAL ( now, watch I have not accused anybody here... Yet(:-, All I say is that there is a potential, just like there was before). Remember Many of those Collocating their trading computers on the exchanges are brokers as well. Not just proprietary traders. Many hedge funds are totally dependent on GOLDMAN for example, for funds/loans, executions , information , etc.

So, the question arises, are these situations susceptible to all the sickness the exchanges have , always, possessed?

My Unqualified answer is Yes, and there is nothing new under the SUN.

The only question is what are you going about it?

Are you going to join the "Citizens for Honest Markets" movement or set there and say. Well, this is capitalism.

I am not entirely passionate about this issue. Ambivalence comes in, because, that is the way capitalism worked for over hundreds of years and there is lot of that going in our society anyway.

If I could find the financial backing and support, I maybe able to put together a "real" No BS proposal for the exchanges that will be free and publicly transparent where it can not be. But this where I would leave it.

And I would also like to tell you that, you do not have to get excited, because somebody with a interesting name and/or shouting on TV attracts attention, without really comprehending the entire issue or able to propose the solution ( technically speaking) for these
AGE OLD PROBLEMS IN THE MARKETS.

Citizens For Honest Mmarkets Manifesto

Here is the Game Goldman Wins. Not Because It is smarter, But it is richer. Rich Always win the games, Especially where the Money talks not the brains. So Do not confuse the high salaries at Goldman with brains, they are lucky to have the money to play the game the way , few people can.
So, how do the Goldman's play the game?
Here is how. Typical user is set up to trade the way the picture shows in above portion. Individual's trade orders must go through layers of network/router and processing machine(s) ( especially at the brokers) to reach the destination. That is the same for either initiated query or order placement. Even the query done by the software without users request must go via the same/similar path. This means that information is delayed at every step of the path. Even though each one of these steps is small time for human EYE, it is eternity for computers. Even if individual is really a programmed computer(many individual platforms now offer scripted/programmed trading) the time delay , especially compared to the GOLDMAN's set up is enormous. This translates into following: Goldman computers can see the depth of the exchange offerings very fast and then react in a way that almost guarantees the picture is frozen and same as "last seen" by Goldman computer. Individual user is , practically , guaranteed that they see a changing picture, especially in high volume, fast moving markets and/or securities. Why do you think, you see millions of C/SIRI/AIG etc. shares of bankrupt/almost stocks is seen daily? . Yes, Goldman is a volume consumer! Please understand, there is nothing illegal about any of what is described above. People that had the ticker tapes in Great Depression made lot of money, while the rest lost everything. Goldman is using BRUTE POWER to make money. Yes, there is some smarts in in what they do, but nothing you and I could not do for few hundred thousand dollars. Stay tuned as we will get into more details of protocols and parsers as we will illustrate how much further Goldman types can enhance their advantages over others. Let me also point out that besides stupid day traders(most of them) the targets of Goldman types are institutions. Remember the example of the CANCEL/REPLACE mentioned in previous installment. Ok Reread again. You already know, you and I do not place orders for 100000 IBM shares. Institutions ( funds, pensions etc) do.
1027.30 1028.61 1030.73 1033.38 spx 1021.77 1020.46 1018.34 1015.6

Tuesday, August 25, 2009

Need few days of distribution

Remember Please, Distribution here is used in the context of Rising, sideways market. It could continue few days and few points, nobody exactly knows, but Distribution does not mean market is going down tomorrow necessarily.

Friday, August 21, 2009

Things have become Jumpy, fast





The picture below shows the Pink oscillator, which was stopped dead around the zero line, instead of piersing it and moving the market lower with it. That is unfortunately for bears , a clear, distinct charaterstic of the bull market in its distribution phase, which , again, unfortunately for bears, can last long times. You see that imprinted in an (almost) aimless zigzag of the PCratio oscillators.

Wednesday, August 19, 2009

Some more downside?

Th chart below is our proprietary recession indicator, It has captured the Market and economy decline in 2008 with absolute brilliancy. Where is it now. Read the comments inside chart please.
985.37 987.19 990.14 993.82 spx 977.69 975.87 972.92 969.25

Yesterdays, PCratio was clearly not (:- to bulls (in a short run). How about today? see the chart below( coming)


CITIZENS FOR HONEST MARKETS MANIFESTO.


Today we will lay down few details about how we see the the really honest markets functioining. The purpose is two fold.

1) Let Trading Public Understand what the real issues are

2) Present initial requirements for HONEST MARKETS


Markets, exchanges have evolved in all kinds of ways. But basic principles have remained the same. The people closest to order flow, have always had an edge over the people removed from the order flow , by layers of brokers and means of delivery of orders. So, nothing changed, truly nothing and there is no amount of misconceptions spewed by those that think they are helping fairness issue or those that would like to present things as fair and square will help.


Introduction


The truth is that in some shape and form( mostly electronic) you still have the order flow advantages that can be gained by the deep pocket market players over the rest of traders/investors.


Why is that, who/what has replaced the floor broker ( who used to control order flow, could see all orders, while people could only see bid/offer). Floor brokers have been replaced by computers and routers ( electronic network facilities). Those who are closer to the exchange floor computers ( that run BOOKs, market algorithms that manage orders) and routers ( network traffic directors, like the traffic lights that regulate which car goes next into the intersection), can accrue big advantage, as they can see the orders faster and wider than other participants in the markets. If there was one exchange, there would be this advantage for sure, but add to this that there are different exchanges(countries and state), with different rules and it will become clear that the market is the wild west to be fought for by organisations with deep pockets and global interests to get the "front view" of the order "market depth" ( market participants bid and offer maps away from highest bid and lowest offer ( only view market had for a long time before electronic markets).

Joke, sort of. Boris, I understand all of that, but why/how is that important. Well, imagine. I place an order to sell 1000000(million ) shares of IBM( hUH!) and somebody comes in with the order to buy it. Now, If I could see buyers order and take my sell order away or just grant few shares instead, what happens! HUH! What happens is that I know there is buyer there for 1000000 shares of IBM and will try to raise the price on him/her buy offering the rest of the million shares at higher prices. I have forced the market participant to play with me with


------------ OPEN CARDS ---------------


The only reason I was able to do that is that I was able to CANCEL( SEND THE FIX PROTOCOL CANCEL or CANCEL/REPLACE) order faster than the buyer could get his/her order onto the BOOK.

Yes , this is like going to casino having to know the cards of every players. Do you think I would have advantage? And there are other games played in the markets. Do not get me going. So, all of those talking in abstract, please stop and level with people. If you do not tell, I WILL



Now, Please Note, I said nothing, so far, about legality of these kind of games.


Continuation to follow



We discuss the role of routers and protocols and the scanners and parsers, which are responsible to get this "total market picture" and react fast.
What Does Antisopitalist's Attraction Point and Beethoven have in Common? Read the text inside the picture while you may like to listen to this as you read the picture

Tuesday, August 18, 2009

PCratio Curled

Another Splendid Example Of AP( Attraction Point ) Trading, with the days top( as predicted) ending up BULLS-EYE at the Fifth Intraday High Attraction Point ( FIHAP).
988.11 990.09 993.30 997.30 spx 979.75 977.77 974.56 970.5

Sunday, August 16, 2009

AP triumph

994.34 998.82 1006.08 1015.13 spx 975.44 970.96 963.70 954.65

Dear Reader, We present here One of the clearest and pretty abundant examples of AP ( Attraction Point) confluences. I have discovered this method about 5 years ago. I am as excited as I was first time. I can never get over the beauty and usefulness of this concept in the market and especially when it is practiced in the confluence form, just like below.

Thursday, August 13, 2009

Frozen In Time And Space

1015.46 1019.14 1025.11 1032.54 spx 1002.18 999.94 996.26 990.29 982.8


The PCratio indicator, can often freeze in time, especially at that late stages of the bull run and that is where we are now. The Blue and Read oscillators are frozen/almost in time and space, moving sideways to slighely lower and it could stay there for a while

Tuesday, August 11, 2009

AntiSopitalists Unite


When We Antisopitalists started our site, people did not understand who Sopitalists were. Now, They do. They may still not understand what SOPITALISM exactly means, but they feel it. They did not even know too much about FEDeral (Un)Reserve, but now they do and give it popularity less than Congress! The Sopitalists are in dismay, that Internet has disclosed them as unabashed swindlers having and/or attempting to, destroy America as the Germany was destroyed after world war one and was forced to elect Hitler to go on offensive. We all know how that ended. I hope American People will continue to remain vocal and replace the current corrupt governmental and monetary system(this is politcally equal opportunity bashing, I do not like either Democrates or Republicans, as they have proven to be beholden to the same dark forces and politics) with people who, think the way our forefathers thought about small , unobtrusive government, that lets entrepreneurial spirit live and revives our great country. I can hardly stand to watch from sidelines and let USA be the second empire(after USSR), that I lived in, to vanish because of the bad economic (mis)management.

Hallelujah!

People need to express themselves, hopefully without violence, but clearly that we are not going to take all kinds of opportunists (ab)using USA resources human/physical to their advantage.

From Dear John, Clickme-> Shut Out At Home, Heading To China?

Saturday, August 08, 2009

Could be!


1009.71
1011.25
1013.74
1016.86
spx
1003.21
1001.67
999.18
996.07

Just looking at the picture I posted for you( initially for subscribers only), it is clear that SPX may have kissed goodbye to the wedge/Cliff it was hanging off for a while now. Yet, The clear momentum signs of turn on an intermediate term are not visible at all. They can be imagined by desperate shorts, but they are not truly visible yet. Nevertheless those who know how to test the short side maybe more rewarded at this stage than any time from the 867 July low ( where we made our last purchases).

Friday, August 07, 2009

SHAK ATTACK?

Does Anybody See Confluence Of APS and Channels and Pattern Ourlines Here. IS Confluence Working. I think so. Actually I know so.
THIS IS WHAT OUR SUBSCRIBERS AND FREE SUBSCRIBERS KNEW THIS MORNING BEFORE MARKTES OPENED! Judge Yourself, if they had a valuable info.

Thursday, August 06, 2009

There yet?


1006.88
1009.17
1012.88
1017.50
spx
997.21
994.92
991.21
986.58


Dear Readers, we have free week about once a quarter. It has been some time we did not do one. SO, Dear Reader, to familiarise yourself with our services, please go and (SELF) register yourself at
Good Trading Dear Readers

Tuesday, August 04, 2009

Within, Striking Distance/time, is a local top?


1000.62
1001.88
1003.92
1006.47

spx
995.30
994.04
992.00
989.46