Fibo & Geometry

[tedk]

A = B ?

[theplumber]

Originally posted by spike500
Found this on the internet:

Received this message from a member of my investment forum who is currently on the floor of the Chicago Mercantile Exchange: "Only have a minute but, write more later but... The entire S&P price action in the futures is being controlled by one counter party. All the guys frickin' hate them: their CME clearing number is 990N and they clear through Gelber.

That one account is solely responsible for the current level of the S&P. They are the ones that are throwing the S&P up overnight. Then they are the ones that are sitting on the bid all day long, supporting the market action. The S&P pits have been decimated, absolutely ruined. There is no volatility, so all the traders have left.

Now the hot pit is the Eurodollar pit. Go figure, that used to be like watching paint dry. All the traders I have talked to view the market as being rigged.

They keep waiting for the price action to break loose, but it never does. They are stunned by the lack of volatility. And furious. "Time after time after time 990 just sits there on the bid. Don't they ever go away. They just absorb the entire market and then push the price whereever they want it to go. 'Gee, I wonder who that counter party is.' They are all terrified of shorting, because every time they do, they get drilled. I thought it was just my systems that weren't working that well, but they are far more dispirited than I."

Intervention at its finest, your tax dollars at work, providing the ultimate tax to us all. We have watched 2000 contract market orders on the Bid at key down levels of - 50 and - 100 on those rare days when 990N decides the program trading will revert to a well defined pattern of "allowable" retracements. The Minis are being rigged in order to provide "support" for swollen price levels. They have to be for now, as without the daily rigging, "Price" would revert to its inherent "Value," a disturbing proposition to those benefitting from the financial economy's adolescent denials.

Counterparties provide an important function in any exchange, liquidity. Given the incessant "intervention" by 990N, there is very little liquidity beneath these markets to provide real support.

Jun 16, 2004, John Mackenzie

I assume MacKenzie knows the "intervention" by 990N isn't acting on customers behalf, or does he have a clue? Talking to a bunch of spoiled brat traders losing money I could come up with about 100 conspiracy theories a day. Right now collars are all the rage on Wall Street. Market going up with high put volume? Arbs working every possible angle to hedge themselves like never before . 8000 hedgies, 401K Mutual funds and pension funds all getting in on the action of hedging. A perfect example of hedging that may relate to the equity markets are GSE's. GSE's hedge their mortgage portfolios using swaps and it has been an impact since 2002 on the financial markets. This creates a duration gap, which is a measure of mismatch in effective maturities of the assets and liabilities of the GSE's. This measure use to fluctuate wildly but since 2002 have barely moved. GSE's
have been much less willing to tolerate duration gap
fluctuations, meaning that they are quicker to hedge
themselves when bond yields move.
As the GSE's are some of the biggest financial companies,
their increased hedging activity has put more pressure on the
swap market as they become more active hedgers. This in turn
has had an impact on other mortgage investors. With the GSE's
now being quicker to hedge (and thus having more of an impact
on the prices of those instruments used in the hedge), we are
seeing more and more mortgage investors try to hedge
themselves sooner and more aggressively. The result has been
sharper movements in Treasuries and swaps as mortgage
investors try to figure out where they stand and execute more
quickly. Those sharper moves in swaps are now having a more
significant impact on corporate bonds (which in turn impact
equities), which is why it is now more important than ever to
keep an eye on the swap market for signs of panic in the
mortgage community.

The equity markets are hedged like never before as well since the low of 2002. They use one thing called a collar . Collars are hedges large investors initiate to protect equity
portfolios through options, normally over the counter options but lately it has expanded to futures, big contract and eminis. an investor shorts
an out of the money call to finance the purchase of an out of
the money put to protect a long portfolio of stocks.

Several large collars on the SPX are expiring now. The way
they expire is in traunches: a portion of the structure
expires each day for several days. The over the counter
options themselves expire for cash: each day the portion
expiring is marked against the closing price of the index and
CASH (not stock or futures) is delivered or received. Because
the broker who has on the other side of the trade is short
physical futures to hedge the risk, they must buy the right
amount back each day as the options settle.

Because the option settles at the closing price, it actually
behooves the broker to begin buying late in the day and “drive
up” the closing price higher than their average execution
price: the broker “earns” the difference between these two
prices as pure profit. This is as close to free money as you
can get.

Derivative trades are structured often with these “free”
opportunities in mind. The investor implicitly pays these
costs: they either don’t think ahead of time when they
initiate the trade or they don’t care (no one really notices
except them). So to give a think someone can corner the huge financial markets we have is kind of crazy when you think about it. Especially now with all the other things being done with hedging the way it is today and how people can hedge with another market all together. Maybe I'm wrong but that's what I see.

[spike500]

the plumber

thanks for your explanation.
I'm just trading so i don't known anything about who's doing what and why.

The only thing i did is look at the charts and the volumes.
I don't see any clear proof of manipulation .
I also think that people who fail put the blaim on someone else who's, according to the one who looses money, manipulating the market against his position.

[Gavishti]

Whether someone is intentionally manipulating the markets I don't know. To think that there would be clear, easily discernable evidence is absurd. To think that someone with the appropriate motivation, bankroll, and skills could not do it is also absurd.

Regardless of whether the markets are manipulated or not, this is what is available. Figure out how to deal with it or don't participate. Your trading should not be based upon the fairness of the markets. They are not fair. They just are.

[theplumber]

Originally posted by Gavishti
Whether someone is intentionally manipulating the markets I don't know. To think that there would be clear, easily discernable evidence is absurd. To think that someone with the appropriate motivation, bankroll, and skills could not do it is also absurd.

Regardless of whether the markets are manipulated or not, this is what is available. Figure out how to deal with it or don't participate. Your trading should not be based upon the fairness of the markets. They are not fair. They just are.

I'm in the camp who thinks the markets are fair. I work hard, put in long hours, and make money. Can't get any fairer than that
Some interesting commentary from Decisionpoint.com

"No big surprise then that my office has begun receiving claims that various conspiracies to manipulate the market have been underway. Most claim that conspiracies are preventing a market tumble. One received this week was different, an explanation of the conspiracy that has purportedly been underway since last year to keep the stock market in a flat trading range. Supposedly a rogue super trader going by the name of Igor, but which may in fact be a group of super traders, has been making a fortune by conspiring to keep the market flat since last November.

Since it would obviously be impossible for one trader, or group of traders, to overpower the influence on the market of large Wall Street brokerage and investment banks, whose program-trading alone accounts for 50% of all the trading volume on the NYSE, plus the 7,000 hedge funds that are out there, also able to either buy or sell short, it seems Igor needs, and has, some pretty powerful co-conspirators. According to my 'informant' they include large institutions, and even the Chicago Mercantile Exchange itself. The 'evidence' is that several traders have told him that is what is happening, including one trader who had no other explanation for how he could have suffered a huge loss on a particular trade. It had to be a conspiracy against him. Sure.

A few years ago a similar conspiracy theory, this one regarding gold, spread across the Internet and through newsletters. The price of gold had been in a long bear market, and international central banks, probably tired of seeing the value of their gold reserves disappearing, began selling gold from their reserves. That selling did push the price of gold down further, and frequently stopped attempts by gold to rally. Suffering gold traders soon came up with conspiracy theories to explain their problems. The most popular was that world central banks, including the Federal Reserve, were in a secret conspiracy to keep the price of gold low, for some obscure reason.

Those buying into conspiracies, and believing the stock market is being deliberately held flat by a conspiracy, may wind up as surprised as those who swallowed the gold conspiracy theory were, when gold soon reversed direction and began its powerful new bull market.

History tells us that a market that is flat for a long period is setting up for its next move, and the move is often big. The problem is that flat volatility by itself does not reveal the direction of that move.

In any event, there are more than enough simple, common sense reasons for the flat market, without involving conspiracies." Sy Harding

[Gavishti]

I am not suggesting that there is some big conspiracy. Money made and lost by most people in the stock market is a result of their skill and discipline -- or dumb luck. My point was that the markets can be manipulated. To think otherwise would ignore history. Market manipulation has existed as long as there have been financial markets. Joe Kennedy made a lot of money manipulating the markets. He is only one example. I am quite confident that I could create a system to manipulate the markets. There are many out there that are smarter than me. The world does not lack in those that have the motive. Many with the motive have access to the money and the skills. You must also consider that with multiple groups manipulating the markets they don't all have the same plan. They tend to counterbalance each other. Their success is limited.

Bottom line: The markets are manipulated. Accept it and deal with it. You are not going to change it.

[theplumber]

If I have more money than you, are on the opposite side of your trade and decide to squeeze you out of your position, that isn't manipulation it's the way the markets work. We don't see things as they are, we see them as we are. Kennedy, PTJ (who has admitted to running the pits for a day or two) or Soros don't manipuate, they are the market. It's YOUR perspective that says it's manipuation. Why do I say this? Because the cycles are unaffected, my models and even RenTecs models shoudn't work if there was widespread manipuation. Kennedy "manipuated" a cycle that already existed? No he took advantage of it. The way things are shouldn't be confused as manipulation. Anyways, where do you think the markets go from here? Never seen you post a chart but I use your efs'.

Originally posted by Gavishti
I am not suggesting that there is some big conspiracy. Money made and lost by most people in the stock market is a result of their skill and discipline -- or dumb luck. My point was that the markets can be manipulated. To think otherwise would ignore history. Market manipulation has existed as long as there have been financial markets. Joe Kennedy made a lot of money manipulating the markets. He is only one example. I am quite confident that I could create a system to manipulate the markets. There are many out there that are smarter than me. The world does not lack in those that have the motive. Many with the motive have access to the money and the skills. You must also consider that with multiple groups manipulating the markets they don't all have the same plan. They tend to counterbalance each other. Their success is limited.

Bottom line: The markets are manipulated. Accept it and deal with it. You are not going to change it.

[digilume]

cyclical

A to B is the "in sample data" in time and price (hi to lo)
Using the Fibo cycle tolls set to the ratios shown,
There are some good turning points. Fridays was right on cue with a triple top as confirmation, and a drop stopped right on the .563 retracement. This demonstrates use of the ascending and descending octave scales, 0.583 aand 0.75 added.

(Screen capture not clear on the original 60 min chart so a 360 min is used here.)

Cheers

Gary

[tedk]

the fractal continued...
below the DAX tracing out a fractal last week. From a previous screen capture, top right the 90-min of monday 21-jun and left the daily and
the assumed price path (blue). Below what happened last week.

[tedk]

more fractal...
it took the 21-min some time to shoot higher (right). The daily is taking some time too.
Wait till the FED has spoken?

[Gavishti]

I do post charts occasionally. Although I would prefer to be bullish, I am bearish.

Manipulate per Merriam-Webster: to manage or utilize skillfully; to control or play upon by artful means, especially to one's own advantage.

I think that the FOMC will be quite disappointed to find out that they are not manipulating the markets. The central bank of Japan will be quite upset that all that cash they expended to manipulate the currency markets was all an illusion.

Regarding Kennedy. If he was able to force one stock in the direction of his choice for a short time then he manipulated. That it was headed in that direction is irrelevant. He was able to force it down further. This is well documented. To me that fits the definition of manipulation.

WorldCom manipulated its stock price. Enron manipulated the energy markets.

There are many different reasons and methods to manipulate the markets. It is part of the market. As I said, I am not suggesting that there is some grand conspiracy. No one sits there and watches my trades so that they can turn them against me. They are doing what they do. It isn't about good and evil. It is just the way the market works.

Whichever efs of mine you are using I hope you find it of benefit in staying ahead of the manipulation.

[digilume]

.666

attached
note next timing points

[digilume]

Music

Note the turning points were extrapolated from point B
The chart is unchanged since 24 June except for price.
This uses the fibo cycle finder set to Diatonic measures as described by Gurdjieff Ouspensky.

[FibbGann]

I wanted to thank you all for your posts! You are off the hook with the charts and detailed info you come up with. I only wish I had people like this at my forum.

Keep up the great work!

[digilume]

efs

I am curious about the EFS that were mentioned. Which are they please? I want to get one that does a grid like the fibos / diatonic musical scale ratios. It would allow user to pick opposite corners of the grid with the cursor and draw it. Then it has defaults for the horizontal and vertical ratios. Then you can save different sets of ratios as recallable named ratios. You could also set the start to 1.0 lenghts as number of bars. The hi to low could be set on hi lo of dates or hi low of chart, or just drawn. Then there are the diagonals ....
Gary