While many people are getting turned and twisted in discussions of economic factors and whether or not they will lead to a stock market rally or decline, I have a different matter for you to consider. Does your economic theory answer these two simple questions regarding the SPY cash chart, below?
How can it be, that not one person (or company) in the whole world wanted to buy cash SPY over 417, on the evening of February 2??!! And how can it be that not one person (or company) in the whole world wanted to sell cash SPY under 411 on the morning of February 3 after the economic report?
Keep in mind, there are thousands, perhaps millions of people and/or companies who are candidates for buying and/or selling this index ETF. Why did none of them act to exceed these limits shown? I mean none. We know that precisely no one did because there are no trades above or below these prices at least in the cash market sessions.
In your economic theory of interest rates, money flows, currency transactions, inflation rates, intermarket divergences, etc., etc., etc. how is this pricing phenomenon explained?
Have an excellent start to your evening,
TraderJoe
Well, I can say that I'd like to trade at a lot of different levels, but that doesn't mean the market lets me!!
ReplyDeleteYou don't mention that there are futures markets that have been trading all along. I would like to see how the gaps would develop if they did not trade overnight futures.
ReplyDeleteIt would also be interesting to see how the market would react if such key news like the cpi were released with the cash market open. Possibly there is an intention in publishing the key news out of hours, so that, with only open futures, it is easier to slow down, stop or "make up" a move.
ReplyDelete6Q .. you are getting 'warmer'. Yes, the futures market trades before and after the cash market, but all that does is shift the question to the futures market as follows:
Deletehttps://www.tradingview.com/x/jS0Wvau4/
And pls don't miss the larger point of 'econometrica' versus pricing, and what economic indicators 'predicted' (or did 'not' predict) this pricing at these times.
TJ
Reminder: FED Chair Powell scheduled to speak at 12:40 ET today. See calendar for Tues 7 Feb, below.
ReplyDeletehttps://www.federalreserve.gov/newsevents/calendar.htm
TJ
SPY 30-min: SPY breeches the trend line and closes the first gap.
ReplyDeletehttps://www.tradingview.com/x/MPi8Nz3m/
TJ
SPY 2-min has a real 1.618 x leg up. Let's see if it can build an impulse with a true fourth and fifth wave.
ReplyDeletehttps://www.tradingview.com/x/VPqdUX0O/
TJ
ES 4-Hr: although the 'FED bar' is now gone, the black count has not invalidated, and should be allowed 'one-last-chance'. If it does invalidate, a more bearish red count, with a truncation at the high can apply. If you check earlier posts there were five-waves-up to that asterisk (*).
ReplyDeletehttps://www.tradingview.com/x/e8k8YwWl/
TJ
Looks like 5 is on its way. After today's traps I would think everyone will be gun shy at the top.
ReplyDeleteIntraday chart patterns are obviously going to be subject to manipulation. Even in Robert Rhea's famous "The Dow Theory" it was noted that the indexes could be manipulated by a few large players for a day or in extreme cases even a week or two, but they cannot change the primary trend.
ReplyDeleteNow Rhea did not live in a world of fiat and interventionism. We do. The long term bias should IMO always be towards inflation of assets of all kinds as a result of this debasing of the currency. The primary trend can be seen over longer periods of time in terms of "real constant dollar" adjusted indexes. The 1970s are a prime example - 14 years of the market going sideways resulted in a 65% loss in real inflation adjusted terms, but basically flat in nominal terms. You can also see a clear as day simple zig zag pattern from 2000-2009 when you adjust for inflation, where most people see two bulls and two bears with a new nominal high in the 2nd bull.
Yep. Gold adjusted ATH was 2000.
DeleteI don't think manipulation alone explains the phenomenon. Why wouldn't they pay above or below, either. They could have created even better traps that way. Yet, I do think manipulation is a 'part' of the spike price phenomenon.
DeleteTJ
A new post is started for the next day, with the definitive answer to the question above.
ReplyDeleteTJ