...And They Have a Plan. (Live.)

@Overnight I am following your log/journal with interest. During the last couple of weeks have I tried myself to do some discretionary, intraday, trading on ES. Mostly before and shortly after the start of the stock trading day. However, I was not able to be consistently profitable. So I decided to stop doing this.

Politics indeed have a large influence on the daily, and intraday, price swings. But we are now reaching the end of the year and I guess that institutional investors want to push up the prices to make their end-of-year numbers look good. Good old window dressing.
 
HobbyTrading said:
@Overnight I am following your log/journal with interest. During the last couple of weeks have I tried myself to do some discretionary, intraday, trading on ES. Mostly before and shortly after the start of the stock trading day. However, I was not able to be consistently profitable. So I decided to stop doing this.

Politics indeed have a large influence on the daily, and intraday, price swings. But we are now reaching the end of the year and I guess that institutional investors want to push up the prices to make their end-of-year numbers look good. Good old window dressing.
More...

I realize you are making commentary and not asking a question.

Man, I gotta' tell you, this is the weirdest shit ever. Remember what was happening a year ago at this time? We were plummeting. This year, we are totally opposite. It is nuts. January 2020 is going to be active, for sure.

Remember...Phase one trade deal is not signed yet. :-)
 
nooby_mcnoob said:
tough to manipulate ES/SPY given the sheer volume of the components
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This is true. However, there is $145 billion being traded in just ZN each day. Rate futures order flow is much more than enough to move the index. This means that bond traders (largest spec on earth) can force short covering, run stops on longs, and in general, just manipulate the index any way they want. (Though they know and fear the effect of cash buying in stocks on the valuation of bonds).

Look at a chart of bonds and you will see where all this money is coming from that is pushing indexes up.

bonds.png


Treasury bulls are attempting to put a floor in on this bond sell off. (Indexes could pull back)

Yields were at all time lows in SEP. It's a big move, even after an all time high.

Bonds are king and CME GLOBEX is their dutiful servant.

They really like to give statistical risk based margin discounts to traders (SPAN). This means that relatively small speculators can trade with the big guys (NoB spread, BoB spread, TuT spread, etc.)

Look at the spread between the volumes here. The volume being traded in rates is insane.

volumes.png

(From CME front page https://www.cmegroup.com/)
 
Overnight said:
I honestly do not think he was tweeting that one to try to push markets in a direction, because we were already at ATH. And the market's knew it. My paranoia is stemming from how flip-flop Trump and that China guy (not Xi, the other one) have been in the past.

If one of those two dotards tweets something even remotely bad about trade, like, "we have changed our mind" on something, the markets are going to cry foul and drop a bunch. It has happened too many times before for me to feel safe with a swing. It really really sucks, because the world economy wants to keep driving north.

But until these two fuckers go away, there is way too much headline risk.
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Mr T ain’t going away any time soon. He is easily gonna get another 4 years. I think it best to hold my positions loosely. If long and market breaks south I sell it..double up and go south....etc.

PS we will keep getting ATH’s. Best get used to it. Will see some corrections to be sure but in general it is a bullish market and will remain so for some time; most likely.
 
Real Money said:
This is true. However, there is $145 billion being traded in just ZN each day. Rate futures order flow is much more than enough to move the index. This means that bond traders (largest spec on earth) can force short covering, run stops on longs, and in general, just manipulate the index any way they want. (Though they know and fear the effect of cash buying in stocks on the valuation of bonds).

Look at a chart of bonds and you will see where all this money is coming from that is pushing indexes up.

View attachment 215637

Treasury bulls are attempting to put a floor in on this bond sell off. (Indexes could pull back)

Yields were at all time lows in SEP. It's a big move, even after an all time high.

Bonds are king and CME GLOBEX is their dutiful servant.

They really like to give statistical risk based margin discounts to traders (SPAN). This means that relatively small speculators can trade with the big guys (NoB spread, BoB spread, TuT spread, etc.)

Look at the spread between the volumes here. The volume being traded in rates is insane.

View attachment 215638
(From CME front page https://www.cmegroup.com/)
More...

That is insane... Is that the market you trade?

So if I understand you correctly, you are saying that it is plausible to generate a large profit in the rates market by manipulating a smaller market.
 
HobbyTrading said:
@Overnight I am following your log/journal with interest. During the last couple of weeks have I tried myself to do some discretionary, intraday, trading on ES. Mostly before and shortly after the start of the stock trading day. However, I was not able to be consistently profitable. So I decided to stop doing this.

Politics indeed have a large influence on the daily, and intraday, price swings. But we are now reaching the end of the year and I guess that institutional investors want to push up the prices to make their end-of-year numbers look good. Good old window dressing.
More...

Small tip from someone who watches the mind numbing indexes:

1. Really, really trendy days are about 3/10 days. On these days, premarket sets the tone for the first 2-3 hours

2. Otherwise, play the close from the perspective of BTFD.
 
Overnight said:
I dunno' if it was such a good read on the trade deal. All I know is, I need to get the fuck off of demo and micros. But the trade deal has me paralyzed on taking risk as we keep punching through ATH...
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https://www.elitetrader.com/et/threads/the-intraday-is-a-casino.328041/page-9#post-4978126
This is a valuable trading tip right here from tzachi.
Take your time and watch these videos, I'm up to #3 video and that may answer some of your problems.
Mark Douglas is a gem on trading psychology tuition.
 
nooby_mcnoob said:
generate a large profit in the rates market by manipulating a smaller market
More...

Look at this chart. This is UB vs ES. The left side is the cash value of a 1:1 spread long short.
spread.png

The spread is the pink colored one, the white thing is something proprietary.

You can see that computers are trading this thing. It traded higher during the session.

The rate / index spread tracks cash flowing between the stock and bond markets. The two markets are violently competing with each other. Massive amounts of speculation going on.

Here is the thing. Obviously, speculators don't like to lose money. So, when the spread starts running, traders will liquidate. But, some of the participants are just hedging risk, so they're trying to take advantage of favorable prices to hedge.

Favorable prices happen when speculators get stopped out, or are forced to cover shorts.

Look at this chart of the closing session...
ES.png


The orange circle is where the market is being pushed lower by HFT and risk on/risk off speculators

(hedging cash equities exposure/unwinding bond hedges).

It's causing reverse cash and carry arbitrage!

But, they are in control of the market. (they have the best execution algorithms....)
so they can take the pressure off and look what happened.

The green circle is the short speculators getting forced to cover. It pushed ES up to 3229.

It shows you that the smart money is unwinding their rate futures and aggressively hedging recently acquired equities exposure.

This is a game that very few traders are adequately prepared for. The smart guys know what they're doing. This is all really complicated so don't try to understand all of it at the same time.
 
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nooby_mcnoob said:
Small tip from someone who watches the mind numbing indexes:

1. Really, really trendy days are about 3/10 days. On these days, premarket sets the tone for the first 2-3 hours

2. Otherwise, play the close from the perspective of BTFD.
More...
1. I started noticing that. But nevertheless managed to not properly play those trending days. Unfortunately.
2. I am based in Asia and don't want to stay up all night to wait for trading opportunities near the close.
 
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