Wednesday 27 May 2009

What we are not told

As usual newspapers linked the action on the American stock markets yesterday to the better than expected consumer confidence figure. I am always wondering why media are not able to educate people better how the action on those markets is generated.
This comment comes from a trader, fed up with blatant manipulation of the S&P500 future.

All I know is that every time the technicals tell me to sell, I get crushed. (I trade ES futs) Case Schiller came out this am at 830 and we sold off 3 or 4 handles and then rallied 10 handles + right on the open even before the consumer confidence came out @ 10 for no reason other than to create a BS short squeeze in the ES. It was as if the people that needed to know to move the market knew in advance the CC#, and i'm pretty sure if that # had been terrible we would have rallied anyways. We have tested the 875 - 880 level in ES now 7 times. This market wants to go lower. There is no legit equity buying above 900. Real money sells above 900 and takes us down to 880 where futures traders set up short positions and get crushed and forced to puke and take us higher. See 5/18 ... and today. How else do you explain a 4% rally from open lows on NO NYSE volume... the first 25 handles of the rally today (up to 905) was entirely ES short covering leading equities. Notice when ES volume died at 1035 and everyone finished puking we only managed to rally 5 more handles the rest of the day. It really just makes you wonder who is controlling these ES futures like this. I never bought into the whole PPT thing…thought it was a crutch for shitty traders, but someone is definitely manipulating these things to induce short covering rallies at key points when we traders are positioned short and we would normally roll over. At this point with no equities volume I can't see a way this market ever sells off.

We saw Rick Besignor of Execution LLC on CNBC. This is what he heard:

The market is up 2.75% and sell-side desks are completely dead. You’ve got computers doing all this buying.
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