Stepping Stones

UPDATE 1:21pm EDT: Let’s see what’s looming ahead at this point:

Seems to me that the next hurdle will be 876 after which we’ll rapidly approach the 23.6% fib line of Primary {1}. I’m not sure what exactly will happen there but it’s reasonable to assume that there will be some kind of push back – assuming of course at least a few bears are still present and accounted for.

BTW, I just hedged my calls by selling some NQs as we’ve had eight hourly candles to the upside and I expect at least some consolidation here as buying should be drying up at this point.

UPDATE 1:48pm EDT: That was SWEET – dumped my NQs right at 1366.75. Yeah, it might drop further from here but I’m now in the plus for today again 🙂

UPDATE 2:00pm EDT: Wooooowwww… some selling program just kicked in – that was one long candle to the downside on the ES and the NQ. And now I’m seeing some long candles to the upside – jeeezzzes – there are two black bots duking it out with each other – hehe.

UPDATE 2:03pm EDT: This was even more devious – they faked some downside – reeled in a few more shorts and are now driving it up like crazy.

UPDATE 2:05pm EDT: Folks – if you have a futures feed – go and check it out now. This is a sight to behold – seeing some looooong wicks over here. Not sure what’s going on but the tape just went apeshit. Am I missing out on some news event?

UPDATE 2:08pm EDT: Wow, I can barely keep up with this shit – am I glad I’m out of my NQs – that would have been quite a ride. Need to revise my prior statements: Based on what I’m seeing there are two major players duking it out with each other. As to which side will win – your guess is good as mine.

We are at the ES VWAP right now around 858 – the NQ just hit its R2 pivot and I expect at least some retest here. Otherwise this might go all the way. My calls are not liking it at this point.

UPDATE 2:14pm EDT: Okay, this is how I see it – if the ‘boys’ keep this shit up – the end result is going to be along these lines:

Looking at the tape of the last few months I’m not surprised that now even the funds (slower money) are now leaving the market. This thing has become a freaking roulette table and the gyrations at this point are approaching the random. I’m not talking about the fact that we’re dropping at this point – but I recognize blatant market manipulation when I see it. Zero subscribers should take a hard look at today’s spikes in comparison with what preceded them.

This whole game has turned into a drive by shooting contest. There is almost no liquidity remaining, program trading is running the tape, and the rest of us are sitting in life boats while 50 foot waves are waves are approaching from all sides.

The end result of all this is that participation will gradually diminish to the point where the derivatives markets will become untradeable and suffer from an huge loss of volume. But I guess the big boys don’t care as the brunt of their action is in the OTC market anyway. And our intrepid friends over at the SEC are asleep at the wheel – as usual – your tax Dollars at work, folks! Fuck, I start sounding like Denninger now – LOL 🙂

Finally, looking at my SPY calls, now that we have crawled back to the ES VWAP level around 859, it’s also clear that there are some nasty games afoot with option pricing. That market is going to die a slow and painful death as well over the next few years – courtesy of excessive short term greed and lack of oversight. I mean, they MMs always played their little games – no problem – I can deal with that and it’s part of the cost of doing business. But this shit is getting out of hand – you try to get out of option spreads these days without taking a significant hit on your profit margin.

Fuck this – I need a weekend and a few bottles of German Lager. What’s the old saying: Better a Bottle In Front of Me Than a Frontal Lobotomy!

UPDATE 2:36pm EDT: As I always say – bear markets rally higher on bad news and sell on good news 😉 My calls are looking a lot better now – probably will hold them over the weekend.

UPDATE 2:44pm EDT: If you wonder what those floor traders do over the weekend:

Anyway, my calls are looking sweet again – seems like Zerohedge was right (and I didn’t disagree) – market completely ignores any bad news at this stage. But we didn’t even get to the ‘buy the rumor’ stage this time around – a little courtesy dip I guess was it. Feeling good – nicely played – let’s sit back and wait for 881.