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Flash Crashes
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Flash Crashes

by The MoleJuly 7, 2017

The Flash seems to have fun with his new TDA account this morning as I’m seeing very strange activity across the board. Although I never give much credence to the financial MSM attempting to explain the increasing amount of flash crashes we have been seeing lately, I was puzzled to see almost no mentioning of this. Perhaps this is the new normal we should expect during the late Asian trading hours? If so then it’s going to be one long hot summer…

 2017-07-07_silver

The most egregious example is silver which dropped all the way to 14.4 before rebounding back to 17.75. That’s almost a 9% drop and most certainly caused algos to go crazy all over the place. It’s a comparatively thin market and a fat finger is a possibility. But then again, this seems to be happening more and more frequently lately – I remember a recent one on June 26th.

2017-07-07_gold

In comparison the little wipeout in gold looks almost muted but if you took long positions here in anticipation of a double bottom then you’re probably not having a happy morning. No worries – I wasn’t 😉

In general it’s not looking good here for precious metals and those daily Bollingers are starting to point dow now which will facilitate any attempts to take them down. Apparently 2017 is going to be another painful year for the gold and silver bugs – somebody ought to put Jim Sinclair on suicide watch.

2017-07-07_eurusd

Also a bit of volatility over in the EUR/USD but given recent moves it’s more of a blip. That damn pair is on a veritable rampage right now as was to be expected as soon as it gapped to its upper 100-day Bollinger in late April. If you’re on the fence about signing up here at Evil Speculator then you may consider doing it now in order to grandfather-in (or is it grandperson-in now in PC speak?) a low subscription rate

2017-07-07_USDJPY_update

I continue to tighten up my trailing stop on the USD/JPY – seems like it’s now hitting escape velocity and we soon may see it near 115.

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About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • Mark Shinnick

    I saw a twit from that silver trader who said his was that stop and the official price had never showed that low.

  • http://evilspeculator.com Sir Mole III

    Roiled a few algos apparently though.

  • Mark Shinnick

    Peter Brandt? @PeterLBrandt 11h11 hours ago
    More
    TRUTH — Comex has stuck me with a fill on a sell stop even though the “official” low of the day was changed (to above my stop). TRUTH. https://uploads.disquscdn.com/images/fcfa970a553de85b0dd7e5ba673f8bd0e2590ac40e1b55dc55b823115edd86a8.jpg

  • OJuice

    Meaning he had a stop below $14.34? Seems crazy to have such a wide stop…

  • Mark Shinnick

    Yes. BTW, we’ve seen things like this in metals long before the modern algos…but as I recall they happened with fewer tics. Maybe algos provided a bit more liquidity here.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    ok, so I wasn’t imagining that silver spike low.

    Can’t we have a red Friday, once?
    Looney Market.
    STill, it’s not like it’s a surprise.
    😉

    https://uploads.disquscdn.com/images/b09e79548f0b1bf074da4c2d184b37d49fed5ba4162c5744b4af7d25451a81b0.png

  • Mark Shinnick

    No vol crush yet.. game still looks to be on, eventually it will be different.

  • ridingwaves

    surprised were green with all the commodity destruction going on……my smellometer is not liking this….Red could appear out of nowhere today…

  • Mark Shinnick

    Yes, the line appears to be right around here…

  • ridingwaves

    whomever that buyer is at 241 SPY is persistent, they don’t want it straying to far from that number it seems

  • Mark Shinnick

    The longer this little zone persists…the harder the result.

  • Mark Shinnick

    I presume the BTFD’s are hard at this….just wonder when their heads get finally handed to them.

  • ridingwaves

    maybe after Trump Putin meeting….Trump does something twitter dee twitter dumb and Russian hackers steal all of Jamie Dimon’s cash and leave Blankfein in pennies….

  • OJuice

    Should have kept my mouth shut about /GC yesterday… From showing potential to getting shown the back alley. Maybe next week it’ll firm up and present a decent entry.

  • Yoda

    The overall negativity re. PMs on the blogosphere seems more bullish than bearish to me

  • OJuice
  • Mark Shinnick

    Looks like makings of a first crushing from around here.

  • Yoda

    PO changes depending on your Box size

  • Mark Shinnick

    Weirder things have happened at the full moon :)

  • http://evilspeculator.com Sir Mole III

    Well and perhaps that it keeps dropping… :-))

  • http://evilspeculator.com Sir Mole III

    Comex are gangsters – they ripped me off on several occasions back in the days.

  • http://evilspeculator.com Sir Mole III
  • OJuice

    The path of least resistance right now for sure.

  • BobbyLow

    Good Morning and Happy Friday folks.

    I’ve been pretty busy the last few days but managed to read the ES everyday. Mole has had some great posts followed with good comments from the crew.

    Congrats to Riding Waves for having some outstanding trades.

    Saw some good fades of Stock Gurus from Tomcat. Personally, I try to keep my blinders on when it comes to CNBC’s “great stock pickers”. As a matter of fact, they speak so loudly, I can’t hear what they say. Actually, it’s been 6 years, 4 months and 20 days since my last visit to CNBC. My life has been much better without it. :)

    I was recently trading Long Term Bonds and Gold Miners until I found how much they were correlated. So basically if I had 1 R at risk in one and 1 R risk in the other I really had 2 R at risk based on the same directional movement. So I said to myself – self, pick one or the other. So I actually picked neither and went with Gold. I was very reluctant to short Gold so late into this recent move but I held my nose and shorted on Weds. As of yesterday, I thought it looked like a possible buiding of a base or some digestion before the next move down. It’s looking like another leg down and that’s not too shabby. :)

    We’ll see where it goes from here. . .

  • ridingwaves

    SPY 60 min, a little hurdle here on hourly…3 touches so far
    S SPY 242.02, 242.93S
    https://s4.postimg.org/i73xtr5zx/spy_60_min_line.png

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    So I actually picked neither and went with Gold.

    Give me a hug.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • http://evilspeculator.com Sir Mole III

    @BobbyLow – I said to myself, pick either bonds or gold minders. So I actually picked neither and went out with her:

    http://news.7msport.com/news/upload_img/20110130/60.jpg

  • http://evilspeculator.com Sir Mole III

    And she keeps climbing today – basically the inverse of yesterday’s session.

  • Yoda

    there is a gap that needs closing

  • Mark Shinnick

    One default always seems to be that time itself is a correction, that with no downside momo, equities resolve as being supported.

  • ridingwaves

    light volume helps too…G20 meeting acts as support too
    selling out and going hiking
    S out of OCUL for 1/2R

  • Mark Shinnick

    Yep….could be all there is to it.

  • Mark Shinnick

    Way to go man…keeping life’s priorities straight 😉

  • Mark Shinnick

    Long miners, vert tight.

  • OzarkHillBilly

    I’ve spent all day looking at charts, and for the most part I just see opportunities to lose money with new entries at this juncture (primarily looking at indices and such), especially on a Friday. But all the time in front of the screen today has helped me to consider game plans for whatever happens next. As for now, I’ll spend some time playing with my 4 year old.

  • http://evilspeculator.com Sir Mole III

    That’s exactly how I see it right now, which explains the small number of setups this and past week.

  • OJuice
  • https://scottphillipstrading.com/trade-setup Scott Phillips

    Caught the gold move, banked 2/3 contracts, and trailed the final contact on a trailing spike high stop. Was prepared to go long if daily high got hit but it never did.
    https://uploads.disquscdn.com/images/c735e019bfd7c62e93ef3c92a126ccd78028713ce5690c9f250300917ee52a6d.png

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    It did have potential. Easiest way is to set a resting buy order above the daily high, and wait for price to confirm. That way no harm no foul if it keeps falling.

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    His twitter feed is *excellent*. Many good trading ideas, and he exhibits superb trading psychology on a daily basis.

    One of only a handful of “classical charting” traders doing real trading.

  • saltwaterdog

    No – it means he had a sell stop anywhere below the pre-crash action and likely got stuffed with a price miles away (well below) that was elected during the plunge. So hypothetically he was long with a stop below the previous day’s low, which was ~$15,90, and when that broke he had a market sell order to exit. He may have very well gotten a report back with a sale price <$15.
    Most, if not all, stop orders are market if touched orders and you basically agree to accept the fill you get once your stop price is touched, which in cases like this is maddening. What can be worse is the exchange itself will often elect to put a limit on you order for you, which probably would have helped in this case but I have occasionally seen a large gap move against my position and assumed I was stopped out only to discover that I still have risk and the exchange limited my exit. It puts you in the position to then decide to exit at market or manage your order otherwise, but can be extremely aggravating/costly.

  • ridingwaves

    sweet….Nice entry and love the stop placement, did any of the candles on opposite side of peak help with that choice?

  • ridingwaves

    AVEO is just a beautiful thing…

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    PnF 3.75

  • ridingwaves

    I had 3.50 target…. super old weekly candle fill in…

  • ridingwaves

    Earnings season again….thought the shorts had a small window….and still blew it….
    pete meet repeat….

    https://www.bloomberg.com/news/articles/2017-07-07/motion-sickness-grips-stocks-on-eve-of-a-healthy-earnings-season
    snippet
    In the past, earnings have been a reliable antidote. Their arrival each quarter has lifted stocks 100 percent of the time since 2013, and under-estimating the profit machine has been a sure route to impoverishment since the bull market began in 2009. Among investors, however, the sense now is that failure to deliver would have larger consequences.

    With JPMorgan Chase & Co. and Citigroup Inc. scheduled to announce results next week, the market faces a stretch that for four years has seen consistent equity gains. The S&P 500 has risen in each of the last 18 reporting season, accounting for 90 percent of the advance over the stretch, data compiled by Bloomberg show.