Extreme Manipulation Day

2:41pm EDT: Eric and I are watching the futures and all I can say is that there appears some extreme tape banging going on – which is why I don’t discount the orange scenario yet, despite the strong NYSE breadth today.

Yesterday we saw some record lows in the NYSE breadth at the close and today we painted a complete u-turn on the Zero Lite signal. Something’s rotten in the state of Denmark and I think it’s due to the lack of liquidity in the markets. There are only a few players who are maintaining this vapor rally and when they step away (intentionally it seems) there’s nothing left but air below. Then they suddenly step back in and bang the tape higher after having loaded up at the dip.

Maybe the POMO cash the primary dealers loaded up on yesterday was intentionally withheld until today – we’ll see and probably get confirmation of that if we rally hard into the close. Remember that we’ve got another POMO auction tomorrow morning.

Of course this game can go on for a while – until it stops and there’s nobody left to hold the bag. I for one will continue to sell every rip I get my hands on. That’s the only way to beat those fuckers once and for all. March puts baby – March puts – everything in between is just fucking noise.

3:33pm EDT: Magic hour is upon us and I particularly enjoy how the bid/ask spreads in the March SPY puts suddenly stretched to 5 cents across the chain.

FYI – for your general amusement:

Sorry – couldn’t resist. After all – Forest Hump sez: “Evil is as evil does…”