• Tag Archives Flash Crash
  • DARPA Asks HFT Traders How Hackers Will Crash The Market

    Having been responsible for the biggest flash crashes in recent years, it is no surprise that when it comes to the market’s growing structural vulnerabilities, high frequency traders have emerged as the primary authority on how to crash the market in the blink of an eye. Which is perhaps why none other than the Pentagon is seeking advice from HFTs on how hackers could “unleash chaos” in the US financial system.
    According to the Wall Street Journal, the Department of Defense’s research arm, the Defense Advanced Research Projects Agency, better known as DARPA, has been consulting with executives at HFT firms and quant hedge funds as well as people from exchanges and other financial companies, over the past year and a half. Officials described the effort as an early-stage pilot project aimed at “identifying market vulnerabilities.” The WSJ notes that meeting participants described meetings as informal sessions in which attendees brainstorm about “how hackers might try to bring down U. S. markets, then rank the ideas by feasibility.”
    Why approach HFTs? Because of all market participants, it is the “high freaks” who, better than anyone, know how to force a market crash at will. The WSJ was a bit more diplomatic:
    High-speed traders and quant-fund managers, who use sophisticated computer programs to buy and sell stocks, sometimes in fractions of a second, form the core of the group. Such traders tend to have deep expertise in the inner workings of financial markets and the automated systems that account for huge swaths of trading activity today.
    Among the potential scenarios probed by the Pentagon: Hackers could cripple a widely used payroll system; they could inject false information into stock-data feeds, sending trading algorithms out of whack; or they could flood the stock market with fake sell orders and trigger a market crash.

    This post was published at Zero Hedge on Oct 15, 2017.


  • Pound Spikes After May Says She Has “Full Support” Of Her Cabinet

    Prime Minister Theresa May says she is providing "calm leadership" and she has the "full support" of her Cabinet
    — Sky News Newsdesk (@SkyNewsBreak) October 6, 2017

    Amid speculation and doubts that UK Prime Minister Theresa May could be forced to resign as soon as Christmas amid a mutiny of Tory MPs following her disastrous conference speech, which resulted in the pound’s biggest weekly decline since last October’s flash crash, moments ago the UK Press Association reported that Theresa May said she is providing ‘calm leadership’ with the ‘full support’ of her cabinet, which sent the pound surging in kneejerk reaction.

    This post was published at Zero Hedge on Oct 6, 2017.


  • Pound Flash Crashes After Moody’s Downgrades UK To Aa2

    In an otherwise boring day, when Theresa May failed to cause any major ripples with her much anticipated Brexit speech, moments ago it was Moody’s turn to stop out countless cable longs, when shortly after the US close, it downgraded the UK from Aa1 to Aa2, outlook stable, causing yet another flash crash in the pound.
    As reason for the unexpected downgrade, Moodys cited “the outlook for the UK’s public finances has weakened significantly since the negative outlook on the Aa1 rating was assigned, with the government’s fiscal consolidation plans increasingly in question and the debt burden expected to continue to rise.”
    It also said that fiscal pressures will be exacerbated by the erosion of the UK’s medium-term economic strength that is likely to result from the manner of its departure from the European Union (EU), and by the increasingly apparent challenges to policy-making given the complexity of Brexit negotiations and associated domestic political dynamics.
    Moody’s now expects growth of just 1% in 2018 following 1.5% this year; doesn’t expect growth to recover to its historic trend rate over coming years. Expects public debt ratio to increase to close to 90% of GDP this year and to reach its peak at close to 93% of GDP only in 2019.
    And so, once again, it was poor sterling longs who having gotten through today largely unscathed, were unceremoniously stopped out following yet another flash crash in all GBP pairs.
    Full release below:

    This post was published at Zero Hedge on Sep 22, 2017.


  • SEPT 13/ANOTHER RAID WITH GOLD DOWN $4.20 AND SILVER DOWN 4 CENTS ON NEWS OF TRUMP’S SUPPOSED TAX REFORM COMING ON SEPT 25/USA THREATENS CHINA WITH REMOVAL OF THE SWIFT PAYMENT SYSTEM IF THEY DO …

    GOLD: $1324.40 DOWN $4.20
    Silver: $17.79 DOWN 4 CENT(S)
    Closing access prices:
    Gold $1323.20
    silver: $17.78
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1336.44 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: $1332.55
    PREMIUM FIRST FIX: $3.89
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    SECOND SHANGHAI GOLD FIX: $1334.59
    NY GOLD PRICE AT THE EXACT SAME TIME: $1331.55
    Premium of Shanghai 2nd fix/NY:$3.04
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    LONDON FIRST GOLD FIX: 5:30 am est $1332.25
    NY PRICING AT THE EXACT SAME TIME: $1332.20
    LONDON SECOND GOLD FIX 10 AM: $1327.55
    NY PRICING AT THE EXACT SAME TIME. 1328.65
    For comex gold:
    SEPTEMBER/
    NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 3 NOTICE(S) FOR 300 OZ.
    TOTAL NOTICES SO FAR: 54 FOR 5400 OZ (0.1679 TONNES)
    For silver:
    SEPTEMBER
    264 NOTICES FILED TODAY FOR
    1,320,000 OZ/
    Total number of notices filed so far this month: 4,898 for 24,490,000 oz
    XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
    end
    Let us have a look at the data for today
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    In silver, the total open interest ROSE BY A RATHER LARGE 1031 contracts from 187,176 DOWN TO 188,207 DESPITE THE DROP IN PRICE THAT SILVER UNDERTOOK IN YESTERDAY’S TRADING (DOWN 1 CENT(S). WE HAVE NOW HAD THREE DAYS OF TORMENT AND YET THE SILVER OPEN INTEREST HARDLY BUDGES. THE LONGS ARE REMAINING STOIC AND REFUSE TO GIVE IN TO THE ANTICS OF THE BANKERS.
    RESULT: A STEADY RISE IN OI COMEX DESPITE THE 1 CENT PRICE LOSS.
    In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.941 BILLION TO BE EXACT or 134% of annual global silver production (ex Russia & ex China).
    FOR THE NEW FRONT MAY MONTH/ THEY FILED: 264 NOTICE(S) FOR 1,320,000 OZ OF SILVER
    In gold, the open interest ROSE BY A MONSTROUS 6,487 CONTRACTS DESPITE THE LOSS in price of gold ($2.95 LOSS YESTERDAY). The new OI for the gold complex rests at 580,606. NO WONDER THAT WE ANOTHER FLASH CRASH AND ANOTHER DAY OF TORMENT FROM THE BANKERS.
    Result: A LARGE INCREASE IN OI DESPITE THE FALL IN PRICE IN GOLD ($2.95). THE COMMERCIALS SUPPLIED THE NECESSARY SHORT PAPER. NO DOUBT THAT ANOTHER FLASH CRASH WAS ORCHESTRATED TODAY DUE TO THE HUGE RISE IN OPEN INTEREST IN GOLD AND THE STEADY RISE IN OI IN SILVER
    we had: 3 notice(s) filed upon for 300 oz of gold.
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    With respect to our two criminal funds, the GLD and the SLV:
    GLD:
    Tonight , we had a huge change in gold inventory last night: a huge addition of 4.14 tonnes of gold.
    Inventory rests tonight: 838.64 tonnes
    SLV
    Today: no change in inventory.
    INVENTORY RESTS AT 327.088 MILLION OZ

    This post was published at Harvey Organ Blog on September 13, 2017.


  • SEPT 8/ANOTHER MINI FLASH CRASH ON GOLD AND SILVER FAILS AGAIN/GOLD STILL UP $1.10 BUT SILVER RETREATS BY ONE CENT/ISRAEL STRIKES INTO SYRIA DESTROYING A CHEMICAL FACTORY BUT DOES SO ON THE LEBAN…

    GOLD: $1346.60 UP $1.10
    Silver: $18.03 DOWN 1 CENT(S)
    Closing access prices:
    Gold $1349.50
    silver: $18.12
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1355.02 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: $1348.95
    PREMIUM FIRST FIX: $6.07
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    SECOND SHANGHAI GOLD FIX: $1353.46
    NY GOLD PRICE AT THE EXACT SAME TIME: $1353.50
    Premium of Shanghai 2nd fix/NY:$0.00

    This post was published at Harvey Organ Blog on September 8, 2017.


  • SEPT 6/SMALL FLASH CRASH KNOCKS GOLD DOWN $4.90 TO $1334.14 AND SILVER DOWN ONE CENT TO $17.86/USA TELLS UN ITS 5 WISHES TO CURTAIL KIM OF WHICH BOTH RUSSIAN AND CHINA DISAGREE WITH THOSE SANCTIO…

    GOLD: $1334.15 DOWN $4.90
    Silver: $17.86 DOWN 1 CENT(S)
    Closing access prices:
    Gold $1334.20
    silver: $17.88
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1342.93 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: $1339.90
    PREMIUM FIRST FIX: $3.03
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    SECOND SHANGHAI GOLD FIX: $1344.02
    NY GOLD PRICE AT THE EXACT SAME TIME: $1338.00
    Premium of Shanghai 2nd fix/NY:$6.02
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    LONDON FIRST GOLD FIX: 5:30 am est $1340.15
    NY PRICING AT THE EXACT SAME TIME: $1339.90
    LONDON SECOND GOLD FIX 10 AM: $1337.85
    NY PRICING AT THE EXACT SAME TIME. 1338.85 ???
    For comex gold:
    SEPTEMBER/
    NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 0 NOTICE(S) FOR nil OZ.
    TOTAL NOTICES SO FAR: 49 FOR 4900 OZ (0.1524 TONNES)
    For silver:
    SEPTEMBER
    160 NOTICES FILED TODAY FOR
    800,000 OZ/
    Total number of notices filed so far this month: 3,078 for 15,390,000 oz

    This post was published at Harvey Organ Blog on September 6, 2017.


  • Gold Tumbles To Key Technical Support As Dollar ‘Dead Cat’ Bounces

    The Dollar Index is spiking phoenix-like from the flames of collapse this morning on the basis of one jobs number (and still-low Dec rate-hike odds). Gold is reacting to this kneejerk, tumbling over 1% and testing down towards its 50- and 100-day moving-average support…
    We have seen this kind of squeeze in the dollar index before (cough last week after The Fed’s plunge)…

    But gold is breaking down – running stops below the week’s flash crash lows and testing towards its key technical support…

    This post was published at Zero Hedge on Aug 4, 2017.


  • AUGUST 3/GOLD RECOVERS FROM LAST NIGHT’S 7 PM FLASH CRASH BUT STILL DOWN $3.65/SILVER DOWN 10 CENTS/DESPITE THE DROP IN PRICE OF GOLD YESTERDAY, OPEN INTEREST RISES BY OVER 7,000 CONTRACTS/WAR OF…

    GOLD: $1268.70 DOWN $3.65
    Silver: $16.64 DOWN 10 cent(s)
    Closing access prices:
    Gold $1268.60
    silver: $16.68
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1268.88 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: $1263.50
    PREMIUM FIRST FIX: $5.38
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    SECOND SHANGHAI GOLD FIX: $1266,17
    NY GOLD PRICE AT THE EXACT SAME TIME: $1262.30
    Premium of Shanghai 2nd fix/NY:$3.47
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    LONDON FIRST GOLD FIX: 5:30 am est $1261.80
    NY PRICING AT THE EXACT SAME TIME: $1262.25
    LONDON SECOND GOLD FIX 10 AM: $1268.10
    NY PRICING AT THE EXACT SAME TIME. $1267.35
    For comex gold:
    AUGUST/
    NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 73 NOTICE(S) FOR 7,300 OZ.
    TOTAL NOTICES SO FAR: 3212 FOR 321,200 OZ (9.990 TONNES)
    For silver:
    AUGUST
    2 NOTICES FILED TODAY FOR
    10,000 OZ/
    Total number of notices filed so far this month: 413 for 2,065,000 oz

    This post was published at Harvey Organ Blog on August 3, 2017.


  • Western Central Bank Fear Of Gold Is In The Air

    Ballooning open interest, heavy fix selling, aggressive post-settlement selling, flash crashes – this all seems a lot of bother. Perhaps the Other Side is afraid of something. – John Brimelow from his Gold Jottings report
    Wednesday evening at 7:06 EST, at one of the least liquid trading periods of the 23 hour trading day for Comex paper gold, a ‘motivated’ seller unloaded 10,777 August gold contracts into the CME’s Globex trading system, knocking the price of gold down $9 in 25 minutes. There were no obvious news or events reported that would have triggered any investor to dump over 1 million ozs of gold with complete disregard to price execution.

    This post was published at Investment Research Dynamics on August 3, 2017.


  • Machine Mania in the Marketplace: How Computers Came to Own the World

    With 60% of stocks now being traded by bots that fake each other out in order to create buying opportunities, stock exchanges have lost their connection to the reason markets are created in the first place. The exchanges no longer exist as places for people to buy and sell ownership in a corporation. They exist simply as the neural junctions of a conglomerated machine that plays tricks on itself, and your sole goal is no longer to invest, but to put money in the slot machine that is the quickest trickster.
    Many of the people who think of themselves as investors see this pretend investing as being almost risk free now that computers and central banks are running the racket. They put their money in the machines, and machines follow the central banks’ lead, purring along at historically low levels of market volatility as the machines run their automated tasks. A minority of market experts see a market that is building cataclysmic risks as it accumulates fake pricing that has nothing to do with intrinsic value and as the component machines keep getting reprogrammed to do a better, faster job of faking out the other machines.
    [Brad] Katsuyama, whose firm and company were made famous by Michael Lewis’s 2014 book, Flash Boys: A Wall Street Revolt, says computers running complex software conducting trades at lightening speeds [are] a ‘dangerous’ threat to the stability of the market, juicing volumes and sparking so-called flash crashes, where assets swing rapidly in value in a matter of seconds. ‘I think the biggest risk in the market is that 50-, 60-plus percent of the volume is being executed by computer programs who have no idea what companies actually do. They’re just reacting to data. And I think it’s dangerous.’ (MarketWatch)

    This post was published at GoldSeek on 2 August 2017.


  • Why the Price of Silver Could Continue Its 9.6% Rebound in 2017

    Since the price of silver saw a flash crash on July 7 and prices fell to $15.37, the precious metal has managed to continue its third straight week of gains. It climbed 1.2% last week from $16.50 on Friday, July 21, to $16.73 on Friday, July 28, and is now up 9.6% from the July 7 bottom to today’s price of $16.85.
    So far, the gains have been small but steady, with the average daily price gain since July 7 being 0.5%. Because of silver’s ‘quiet rally’ and ongoing mispricing relative to gold, I think silver prices in 2017 can continue to climb much higher. The gold/silver ratio has been above the 75.50 level all month for the first time since May 2016, indicating a mispricing with gold.
    Additionally, I think the falling U. S. Dollar Index (DXY) – down 52 basis points last week to its lowest level since April 2016 – and a dovish U. S. Federal Reserve will help lift the silver price higher. Those factors combined with improving momentum and sentiment all add up to a big bull run for the metal this year.
    Before I get into my specific 2017 silver price prediction, let’s take a closer look at the metal’s third straight weekly gain last week…

    This post was published at Wall Street Examiner on July 31, 2017.


  • Overnight Paper Attack On Gold – Why This One Was Different

    Once again there was an overnight ‘flash crash’ in Comex gold futures trading. This time it occurred at 3:56 a.m. EST at one of the quietest trading periods of the roughly 23 hour electronic trading day. India has gone sleep. The Shanghai Gold Exchange has been closed for about 90 minutes and the London markets are just beginning to function. I guess someone decided it was a good time to unload close $500 million worth of paper gold into the Comex’s Globex electronic trading system:

    This post was published at Investment Research Dynamics on July 19, 2017.


  • Are Silver Prices Going Higher After Last Week’s 3.3% Rebound?

    Silver prices are proving resilient once again, despite closing last week with a sell-off after silver’s latest ‘flash crash.’ Silver prices still managed to post a 3.3% weekly gain from the $15.37 close on Friday, July 7, to $15.88 on Friday, July 14.
    Aided by more dovish-than-expected statements from Federal Reserve Chair Janet Yellen and a drop in the U. S. Dollar Index (DXY) from 96 to 95.13 last week, silver seems to have bottomed out. The 3.3% rise last week came after the silver price fell on July 7 to its lowest level since April 8, 2016.
    That recent bout of weakness for the price of silver also caused a spike in the gold/silver ratio. So far this month, the ratio is up 3.8%, from about 74.72 to 77.58. This means it now takes 77.58 ounces of silver to purchase one ounce of gold – an indication that the silver price is very cheap right now. Cheap silver typically entices investors to buy in, which would lead the silver price higher this year.
    This supports my view that those holding their silver positions will be rewarded with double-digit returns in the coming months. That’s why I’m going to share my 2017 silver price prediction with you today.

    This post was published at Wall Street Examiner on July 17, 2017.


  • Peter Krauth Says Price of Silver Won’t Stay at These 15-Month Lows for Long

    It seems the price of silver has been spiraling out of control lately, down 13.2% from its $17.71 peak on June 6. This morning, it traded 1.3% lower at $15.37 – the lowest since prices closed at $15.38 on April 8, 2016, over 15 months ago.
    The metal took an undeserved punch in the gut last Friday, July 7, when silver prices fell 2.3% following the stronger-than-expected June jobs report.
    But the even bigger news for the silver price last week may not be its latest weakness, but rather a flash crash on Thursday evening around 7:00 p.m.
    Some are calling the event a ‘market glitch,’ but experts are blaming high-frequency trading by computer algorithms, whereby selling feeds on itself at lightning speed. And sadly, these events are becoming increasingly common.
    You’ll note this flash crash was significant, pulling silver down 8.7% very briefly from around $16.10 to $14.70. Although silver recovered quickly, it may have set the tone for Friday’s session alongside the jobs report.
    All of this begs the question of whether or not silver prices are at a bottom yet. Judging by certain technical indicators, we may be near a bottom now, and I think the metal will rally higher as demand from one of the world’s biggest silver markets continues to explode.

    This post was published at Wall Street Examiner on July 10, 2017.


  • ‘Silver’s Plunge Is Nearing Completion’

    – Silver’s plunge is nearing completion – Bloomberg analyst
    – Silver’s 10% sharp fall in seconds remains ‘mystery’
    – Plunge despite anemic global supply and strong demand
    – Total silver supply declined in ’16 – lowest level since ’13
    – Silver mine production down in ’16, first time in 14 years
    – Total silver supply decreased by 32.6 Mln Ozs in 2016
    – Supply deficit in 2016- fourth consecutive year (see table)
    – ‘Falling knife’ caution but opportunity presenting itself
    ***
    Silver has had a torrid time of late with a the ‘flash crash’ seeing a massive $450 million silver futures sell order pushing silver 10% lower in seconds and follow through selling later Friday after the better than expected U. S. jobs number.
    The electronic futures silver and gold exchanges continue to ‘wag the dog’ of the global silver and gold markets … for now.
    If one had just looked at the short-term trends of silver at the end of 2016, you would have thought we would be mad to predict that 2017 would be a bearish year.

    This post was published at Gold Core on July 11, 2017.


  • Gold and Silver Capitulation – Precious Metals Supply & Demand Report

    Last Week in Precious Metals: Peak Hype, Stocks vs. Flows and Capitulation
    The big news this week was the flash crash in silver late on 6 July. We will shortly publish a separate forensic analysis of this, as there is a lot to see and say.
    It’s hard to tell – we don’t have the tools to measure such a thing – but it seems like the hype and aggression from the gold bugs and conspiracy theorists is reaching a fever pitch.
    For example, one high-profile commentator, whose reputation goes way beyond the world of gold, claimed that 1.8 million ounces of gold were sold in a few seconds on June 26. A contract is 100oz, so that means 18,000 contracts. Surprisingly (so often these guys are off by orders of magnitude), this is in line with the data in our own analysis.
    On a typical day, it is common for 250,000 (active month) contracts to change hands. This is about 777 tons. That conspiracy theorist compares this quantity to the amount produced by the miners. He does not acknowledge that virtually all of the gold ever mined in human history is still in human hands, and all of that metal is potential supply, at the right price and under the right conditions.
    And there is another point. Of course, in a free market there would be no futures market in gold or silver. A futures market is for goods that are produced seasonally, but consumed throughout the year. It is a market for warehousing.

    This post was published at Acting-Man on July 10, 2017.


  • Gold and Silver Capitulation Report

    The big news this week was the flash crash in silver late on 6 July. We will publish a separate forensic analysis of this, as there is a lot to say and see.
    It’s hard to tell – we don’t have the tools to measure such a thing – but it seems like the hype and aggression from the gold bugs and conspiracy theorists is reaching a fever pitch. For example, one high-profile commentator, whose reputation goes way beyond the world of gold, claimed that 1.8 million ounces of gold were sold in a few seconds on June 26. A contract is 100oz, so that means 18,000 contracts. Surprisingly (so often these guys are off by orders of magnitude), this is inline with the data in our own analysis.
    On a typical day, it is common for 250,000 (active month) contracts to change hands. This is about 777 tons. That conspiracy theorist compares this quantity to the amount produced by the miners. He does not acknowledge that virtually all of the gold ever mined in human history is still in human hands, and all of that metal is potential supply, at the right price and under the right conditions.
    And there is another point. Of course, in a free market there would be no futures market in gold or silver. A futures market is for goods that are produced seasonally, but consumed throughout the year. It is a market for warehousing.

    This post was published at GoldSeek on Monday, 10 July 2017.


  • Flash Crashes Are a Permanent Part of U.S. Markets: Should You Worry?

    Over the past year, there have been flash crashes in multiple markets, raising concerns that fat fingers, algorithms and/or rogue hedge fund traders are still running amok. We’ll get to the specifics in a moment, but to put the unusual trading patterns in context, you need some important background information.
    Wall Street On Parade began reporting on flash crash activity following the Granddaddy of all flash crashes thus far – the event on May 6, 2010 when the stock market did a bungee jump, briefly plunging 998 points, with hundreds of stocks momentarily losing 60 per cent or more of their value and knocking out stop-loss orders for retail investors. Former SEC Chair Mary Schapiro estimated at the time that individual investors had lost more than $200 million in these improperly triggered stop loss orders on May 6. (Read our skepticism on the official regulatory report here.)
    What is a stop-loss order? Small investors frequently put in place standing stop-loss orders that rest on the stock exchange order books to sell a stock at a pre-determined exit price that is lower than the current market in order to ‘stop’ further losses. Once the target price of the stop-loss order is reached, the order automatically becomes a market order and is executed at where the market happens to be. In properly functioning, orderly markets, this would typically mean the stop-loss order would be executed at, or close to, the designated target price. In flash crash markets, on the other hand, it can result in massive losses to the little guy. (Read more granular details on these types of orders here.)

    This post was published at Wall Street On Parade on July 10, 2017.


  • Guest Post: “Pirates, Arbitrage and The Silver Flash Crash”, by Viking Analytics

    Our friends and subscribers at Viking Analytics have written an interesting article regarding last week’s sudden, 10% drop in the price of Comex Digital Silver.
    Most everyone here at TFMR saw or heard about the “flash crash” in Comex Silver that occurred at 7:06 EDT last Thursday evening. With theories abounding as to how and why it happened, we thought we’d post this commentary for discussion.
    TF
    “Pirates, Arbitrage and The Silver Flash Crash”
    by, Viking Analytics
    One of the quotes that guides my investment and trading philosophy is attributed to Benjamin Graham:
    In the short run, the market is a voting machine. In the long run, it is a weighing machine.
    – Benjamin Graham
    I usually think about this quote with the second sentence in mind. ‘In the long run, the market is a weighing machine.’ As such, I look for occasions when commodities and stocks have diverged from fundamental or benchmark values. After a 25-year career in energy and commodities, I look for ways to profit from those fundamental divergences. But, that is a topic for another article.
    In this article, I want to focus on the first sentence: ‘in the short run, the market is a voting machine.’ I believe that this sentence provides some insight into the recent “flash crashes” that we have seen in tech stocks, gold and most recently, silver.
    Here is the one of the problems with the ‘voting machine’ market in the short-run: there are entities who have the ability to stuff the ballot box and profit from nano-second moves in the markets. Perhaps especially during times of limited liquidity, the market “voting machine” can easily become an “arbitrage machine.”

    This post was published at TF Metals Report on Sunday, July 9, 2017.


  • Silver Prices Bounce Higher After Futures Manipulated 7% Lower In Minute

    – Silver prices ‘flash crash’ before rebound
    – Silver hammered 7% lower in less than minute in Asian trading
    – Silver fell from $16 to $14.82, before recovering to $15.89
    – Silver plunge blamed on another ‘trading error’
    – Gold similar ‘flash crash’ last week and similar recovery
    – Hallmarks of market manipulation as $450 million worth of silver futures sold in minute
    – Trading ‘errors’ always push gold and silver lower. Why never higher?
    – ‘Flash crashes’ increasingly frequent in precious metals, yet rarely happen in stocks and bonds
    – Rapid recovery from frequent raids bodes well for precious metals
    – Silver coins and bars accumulated on dips by ‘stackers’
    ***
    Silver prices got a bit of a jolt this morning when spot silver had yet another so called ‘flash crash’ and fell by between 7% and 10% before recovering and bouncing sharply higher to not far below where the attack on the price began.

    This post was published at Gold Core on July 7, 2017.