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Thursday, January 28, 2021

Elliott Wave Intraday/Update ~ 28 January 2021


MARKET COMMENTARY (hedge fund rant edition)

With call options at record-er highs (this was yesterday) and being so one-sided, the market's leverage is insane. This is what causes the delta/gamma explosions. And the gamma explosions are being fed along with all resulting order flows, bought and paid for from frauds like Robinhood, into computers in amazing chunks of data which slice and dice and spoof it with multiple other trading house computers thereby creating the mega-volumes you are seeing on the daily prints.  Oh yeah, and shaving .0032 off your stock order and pocketing it millions of times over every day.

The speed of the processing flow is incredible, and with the physicality of the machines very close to where they need to be to get all the bandwidth, they can get an edge.  If my computer is 1/4 mile closer to the optimal market electrical intersection, my computer wins. That's how fast they got these things working. 

The algorithms, are somewhat self-learning. The kids college wizards who programmed them have an idea what they are going to do and how they are supposed to behave but when the outer limits of the possible are pushed too hard, they will likely experience melt-downs. The 2010 "flash crash" comes to mind. This was in the relative infancy of (High Frequency Trading) computers handling the bulk of the trading duties and it glitched hard.  There have been other flash crashes since. They are all warnings.

It all gives the illusion of mega-real "liquidity". And volume is heavy that is no doubt. But in reality, there is a lack of real liquidity - not for these prices. As I mentioned last night, there are derivatives upon derivatives on everything traded and then some. There are more ETFs than there are underlying issues to cover them. 

The ETFs are inherently dangerous also.  "Borrowed" and then "created" equities that are "lent" over and over creates a nasty chain of ownership that works when things are smooth, but break the chain somewhere and they can outright fail and have a domino effect. Though they usually work as intended, if volatility goes too high, they can be death machines. And you can be on the hook for negative losses as a result. Oh yes, read the fine print. If the ETF winds up super "glitched" you are on the hook for making up not only the principle that you may lose but any leveraged loss as a result of market moves.

So what we have is basically a sham of a market, an illusion of real wealth and real prices.  And sure, there are still plenty of real people doing order flows and trading but not for someone like you and me. We place our bet, I mean "buy" into our trading platform and poof! off it goes into the maze of machines to get crunched.  And hey, I got my stock order bet for 19.0234 cents! (Yay?  Hey, where did the extra 2 digits come from? Oh well!) Its all so efficient and money-making. Until it's not. All that leverage works in reverse also. 

The hedge funds guys are more or less sociopathic-type personalities. Not all of them, but you don't get to be a hedge fund guy by being Mr. Nice Guy. These guys actually like seeing themselves on the big screen portrayed as cunning raiders! They get a kick out of it. To them "The Big Short" and "The Wolves of Wall Street" is a badge of honor.

So we head into a major COVID recession and what happens?  The economy is falling apart and it really isn't getting back anywhere near where it was, that much is obvious. So what do the guys on Wall Street do? They all want to star in the next "Big Short" movie and they lazily short things like airlines, cruise ships, restaurants, mall REITS (MAC), and any other thing that is suffering economically. Its just wrong of course because these aren't fraudulent businesses like Enron or Wirecard, this is our economy.

And they think its going to be an easy bag. And then they short one stock over 100% and then up to 140% of the float which means naked shorting which is of course supposed to be illegal. And what stock did they pick for this? Gamestop of course. But why? I tend to think its because the hedge fund guys are no good at Call of Duty and get creamed every time they try to compete. Or maybe they loathe going into the actual store and having to wait in line with Millennials they view with utter contempt.

Maybe its just that they seen an opportunity to make Millennials suffer by trying to bankrupt the very thing most Millennials love: Gaming.  Whatever the reason, why is there a mega float short on a $20 stock from a company that actually was doing not so bad and getting along. Why? 

If the reports are true in that the hedge funds are in the hole to the tune of tens of billions on a myriad of normal companies needed for a normal economy....why? These are real businesses just trying to survive COVID and you Wall Street assholes have to short most of the float and/or naked shorting?  When the market has been going up steadily since March??

You need a bailout at a MARKET PEAK?? Are you f****** crazy?

There should be rightly no sympathy for any of them. Retail used the leverage in reverse and caused these lazy hedge fund bums to cry "uncle". But no, they will try to rig the game, change the rules and whine to the SEC about "foreign interference" or some bullshit like that. They deserve to lose their shirts, their jobs, their livelihoods. In fact, they deserve jail time if they have broken any laws which of course many likely did. Who called the brokerage houses in a coordinated takedown of a list of stocks not to be bought and the corresponding options trading limited in them? (This is what they really needed to nuke was the options driving the gamma - and that will likely remain limited).

Well, you lazy guys aren't so bright.  By providing the exact list of stocks to be banned everyone now knows which ones are right over the target. And you have no sympathy from any normal American of all political stripes. You have managed to unite quite a few people who just a few weeks ago thought impossible. We haven't forgot the 2009 crash and all the bullshit that went on there. We are well aware no one went to jail. Do not extrapolate that trend into the future, it's bound to change. The coming negative social mood storm almost guarantees it.

And its a medical pandemic no less with 400,000 people dead and tens of millions out of work and you had the balls to get your CNBC and Marketwatch lackeys to actually whine and cry and take your side?


Are you begging for another Occupy Wall Street this time with the entire political spectrum protesting in unity?

I leave this rant with some ponderings. If there are some 10's of billions of losses about to be recorded in the next week or so (starting tomorrow) from greedy hedge funds, they are likely to try and go scorched earth on the entire market.  Because they just don't fucking care. That much is obvious.


Ho hum, just another .40 print. Very tight grouping of the moving averages. Wilshire record volume print today again (see chart down further below)

The skew on Comp:100 getting horrible again.
US Ten year count. Probably wave 2 in progress.


This is one of those moments in time when you can throw up the same chart and come out with diametrically opposite outcomes.  On the Wilshire 5000, we have a definitive peak and we have a solid 5 small wave structure down from that peak. 

It is possible the 5 waves is the beginning of a big downturn and today was wave (ii) up. Tomorrow or latest Monday wave (iii) down would get going in earnest. I sort of favor this count because of the record heavy volume candle yesterday and I suspect tomorrow will not be much different. However, we need a lower low beneath yesterday's low to make this stick.

And thus the daily would count as thus:
And look at the monthly record volume with 1 trading day left. Every time it tries to mega-poke through the Bollinger band lines, it has a hard time.

Are you enraged yet?

"We blatantly kicked you out of the counting room and boarded up the windows sold your shares in your own best interest. Oh and eat shit, you deplorables are not allowed to have a say we gave you about the shittiest deal today we could find."

Maybe we are all on the same team? (found via ZH)

The opposite count has that small 5 waves as wave (c) of [iv] in an expanded wave [iv] flat count. Today's rebound would be a small wave (i) of [v] up.  Well, heck, if the "top" is not in, we have to have a count for it yes? The one below would likely fit the bill.


Ok, GSE took a big pullback, but really it may have only been a "gap cover". I was half expecting that to happen.  Have any shorts actually covered?

Everyone assumes "it is over", but this one doesn't fit your typical squeeze rally scenario. And there are multiple stocks involved. And there is a ton of enraged and pissed off people throughout the entire political spectrum on this issue. 

If its only wave 1....

I mean did every short cover yet?  (no) Can they keep a lid on this thing without a revolt occurring?


Well, well, well, we have obvious manipulation by the "elites" to screw over "the people", this time over trying to make a buck trading stocks. And many are rightly enraged. Yet well, fuck most of you. You fucking cheered them on when it was obvious that Trump was crushing Biden on election night and it took massive blatant "manipulation" and fraud in 6 key swings states to pull off the election. Somehow it was only those states that needed 4 more fucking days to "count" (as compared to Ohio and Florida wrapping up on election night) to screw over "the people" in a clearly stolen election.

And now your "shocked" on how they can openly just do what they just did by stopping the selling buying of their precious short stocks??

I cry a river.  

LOL, think suing them will help?? LOLOLOLOL guess you should get used to this:

"You have no standing, your suit is dismissed, we don't need to hear the evidence."

And then get used to this:

"I was banned from Twatter because I objected to Wall Street tactics."


But I will sympathize with you if you can somehow manage to twist your brain around to my point of view and admit the obvious: The system is RIGGED against all of us. Trump was an outsider and I doubt you would be stopped in your trading today if he were still President. As proof? Trump Jr. has come out in clear support of "the people", along with...AOC. See how that works? As I have been suggesting "we the people" have more in common than you think and they want to banish those who try to upset the rigged system. Trump was upsetting the system. Many of you Redditers campaigned for him to be gone.

Well you got your wish. But hag queen Nancy, nor the sociopaths on Wall Street don't like you either.  Why do you think they picked Gamestop to be destroyed? Because they literally hate you. They hate you going in there and buying games and fucking off all day while they are in their golden ivory towers working hard on screwing people over. They not only had no respect for you, they wanted to destroy the things you like to do. Get used to it, many of you voted for this.

Way to go, Uniparty! You managed to piss off just about everyone now. 

And oh, its not about race, it won't be about race. Its always been about wealth inequality. Its always been about CLASS WARFARE. And that unites more people against the system than you can imagine. You will see.


I'll be back with more charts and stuff.

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