| | 15 Milliseconds | | |  What can really happen in 15 milliseconds? A honey bee can flap their wings three times and a car’s mechanical transmission can shift almost twice on its fastest speed. Oh yes, and high frequency traders can make millions of dollars, especially when they are leaked information early. That’s right, according to reports by CNBC’s Eamon Javers, Reuters “inadvertently” leaked data before the release of the Manufacturing ISM number on Monday. Literally just before the 10am release of the key economic indicator, there was extremely aggressive action showing tens of millions of notional contracts traded according to information tracked by analysts at Nanex LLC, a Chicago-area analysis firm. Nanex showed a spike in SPY trading volume 15 milliseconds before 10 a.m., and a corresponding move down in the price ahead of the official release time of the information as computer trading algorithms processed the data and executed trades. And what do you know, the number was a huge miss showing contraction and falling well below expectations. After learning of this alleged data blip” Javers did some investigating and he got an actual admission from Reuters. According to CNBC: On Wednesday, Thomson Reuters released a statement to CNBC confirming that it had, in fact, released the data early. "We have identified that there was a minor clock synchronization issue Monday causing this data to be released 15 milliseconds early," the company said in statement. "We are taking measures to minimize clock synchronization issues in order to ensure that release of the data is as close as possible to the official release time of 10 am ET." Reassuring? Not! The question is where can we get the premium Reuters package so we can synchronize our clocks with the HFTs. We’d even add a millisecond hand to our watch. Trade well and follow the trend, not the perma-bull OR perma-bear “experts.” | | ---Larry Levin |
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In conjunction with TheStreet.com and Bar Chart, Trading Advantage Chief Market Strategist Alan Knuckman provides a daily morning update on the global action in stock futures, gold, oil and interest rates. |
| | | | | | | | | Congratulations to Allan Gold Congratulations to our Student of the Day Allan Gold. Allan is a deligient student of the markets and always keeps the Trading Advantage educators on their toes. He has gained a complex understanding of muliptle strategies and is successfully applyin gthem to his trading. Congratulations Allan! | | | NOTICE: Testimonials are believed to be true based on the representations of the persons providing the testimonials, but facts stated in testimonials have not been independently audited or verified. Nor has there been any attempt to determine whether any testimonials are representative of the experiences of all persons using the methods described herein or to compare the experiences of the persons giving the testimonials after the testimonials were given. The average reader should not necessarily expect the same or similar results. Past performance is not necessarily indicative of future results. No person was compensated for providing a testimonial. |
| | | | | OPTIONS: Volatility Commentary | ---Steven Lee / Michael Shorr | Japanese PM Abe has announced his "third arrow" of his grand plan to pull his country out of its deflationary spiral. The arrow has three main points of interest: improving productivity in the private sector, labor reform, and developing new markets. Abe's goal is to raise average income by 3%. The Nikkei was not buying this, falling nearly another 4%. Australia's Q1 GDP was flat at 0.6% with the market looking for +0.8%. A weakness in domestic demand was blamed for the shortcoming. The ADP Jobs report for May disappointed, coming in at +135k versus a consensus estimate of +171k. Last month was +119k. This was the second lowest print since September 2012. Last week, we highlighted a possible situation developing with Monsanto (MON). Two major importers of Wheat, Japan and South Korea, either canceled or suspended planned orders of U.S. Wheat due to a possible GMO contamination found by a farmer in Oregon. There are potentially huge liabilities on Monsanto's side should any end producers (farmers) incur losses due to this. The U.S. is the world's largest exporter of Wheat. They are nearly double the next largest exporter, France. Since we identified this potential problem on May 31st, the stock has fallen about 3.5%. Now, we get reports from MON claiming that this was an isolated occurrence. Most likely the result of an accident or deliberate mixing of seeds. MON says: "tests of 600 samples of each of two wheat varieties planted by an Oregon farmer show no presence of the experimental Roundup Ready wheat, and tests of 30K wheat samples in Oregon and Washington also show no contamination". So, perhaps Japan and South Korea were premature in their reaction to the initial report. Pretty bold from Japan as they still feed their country rice grown in the Fukushima region. Presently, MON is trading about 2% above its 200-Day MA and if we see a pull back to there, we will be looking for a bullish-biased trade signal to be generated. |
| | | | | FOREX: Currency Spotlight | ---Ed Moya | | | We are almost halfway through the year and it appears that one of the best annual trading sneaks will be snapped. Gold appears unable to mount a significant rally that can help regain serious momentum. A 12-year winning streak is in jeopardy as the precious metal is 16% weaker from the January $1676 price. Last week, speculative short positions grew significantly high but net short hedgers reached a similar low peak to the one in fall of 2008. Often times in trading when we see a tremendous amount of small and large speculative money tilted to a certain extreme and the hedgers with a lighter position in the other direction, we see strong reversal. The charts highlight a slight rebound in gold, but nothing too substantial. Price is still in a bearish trend and trading easily below the 200,100, and 50-day simple moving averages. If gold prices do not recapture $1425, further downward pressure may trigger another April-like selloff. |
| | | | | STOCKS: Watch List | ---Charles Moon | | | | Well whatever rebound that presented itself in this market today, got completely absorbed by sellers pushing the markets down. The Dow closed down over 216 points off slightly weaker then expected economic data. Usually the markets would just widely ignore the data and press higher, but these days we are seeing swift knee jerk reactions. As fear is creeping in the markets, the slide are getting deeper and with greater force. It has always been that the market will fall faster then it will climb, and the movements these days are a testament to that. The last 8 months of trading, when the market drops slightly to the downside, there were buyers there to aggressively jump in on the dips. That might be a very risky play as we are seeing further extensions to the range throughout the day. We should see a rebound tomorrow, but if economic numbers turn out bad, then this can trigger another strong slide like today. The 1600.00 level in the SPX is a vitally important support price. If it fails to hold this price point, this can trigger a deep slide as traders may jump in to slam the markets. Watch the reaction closely here as we may approach this level tomorrow if we sell off again. Tesla(TSLA) had a wild day day in the markets. Now in recent times the explosion higher and the huge ranges it has traded in has been crazy of course, but today stuck out to me like a sore thumb. We had a slide early on as the stock held the bottom of its range, only to rip higher as the market extended down. This was surprising to see as sellers have been pressing this stock down aggressively and all of a sudden the support flew the stock to the highs of the day. A very bullish maneuver to say the least. If it can sustain the momentum in the short term, this stock can test the highs here shortly. It did shut down at resistance which is right there at the high of the day, but if it can clear that price then all signs point to a test of the all time high price. I am looking for a rebound, but only if it can withstand the slew of data that is coming out tomorrow. We also need to look at the Nikkei here in the overnight session. If the Nikkei can rebound strong, then it can help fuel the recovery of losses sustained today. The one piece of data I will be paying close attention to is the Jobless claims numbers for the last month. If it falls flat of expectations(345k expected vs 354k previous month), this can cause the market to be even more volatile. Now normally if there is a higher claim of jobless numbers, the market would be bullish since it forces the Fed to continue the QE here. The issue is that we had numbers that indicated weaker job creation today, and the market was very tepid off the news this morning. We did bounce slightly higher off the report, but pressed down right at the open and just kept pressing lower into the close. Look to the pre-market action to get an early gauge on what to expect for the day. Keep looking short term with your trades, and continue to take profits early whenever possible. The reversals in the market are getting faster and more volatile. This is not for the faint of heart, but to the short term trader this is a match made in heaven. Stocks to Watch: INTC AAPL GOOG IBM AMZN FB TSLA GRPN CTXS CSCO BAC C PRU WFC GS JPM MS CMI CAT NFLX WDC GE AIG LULU LNKD DIS KORS COH FOSL CROX STZ NKE UA CHKP JNPR POT GMCR HOG YUM LOW HD LEN TOL V MA AXP DFS LVS MGM TSL FSLR JASO |
| | | | | FUTURES: Technical Data | | | | | ES 1621.00 / 1608.00 POC… 1612.00 YM 15092 / 14962 NQ 2963.00 / 2936.50 | |
| | | | | COMMODITIES: Play of the Day | ---Patrick Assalone | | | | Based on our educational methodology, we are looking for a long entry 1526.75 or possibly at 1527.00.We would also look to potentially trade higher into white space above the contrract high at 1549. The ratio of November beans to December corn hit a new contract high yesterday, suggesting the market is trying to convince producers to skip the assurance of prevented planting payments on corn acres and switch to beans instead.Volume in soybeans fell 33% Tuesday to 133,329, with open interest up 2,461 on light fund selling. |
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