Well there was good news from JPM and BOA (whatever passing stress test means, don't they all pass?) But it seems that the move that began at 3 est today had all the signs of a classic move to take out the short's stops. I was expecting an awful lot of stops to be just above 1380. That was the top of a long channel that goes back to the march 6 low @1332.75 (ES). What surprised me was the strength of the move. There must have been even more stops up there than I anticipated. Though this is a strong market in an election year, I don't think this move will hold for now, because the buying @ 3 pm was mostly shorts covering,. I'm thinking the market will retrace some to be in the right place for the S&P settlement on Friday morning. Then maybe next week, we can get a real nice retrace because we did leave three gaps below us. A little one on Tues - Wed 3/7 , a bigger one on Wed-Thurs 3/8 and a medium one yesterday to today. There was also a fourth little gap Thurs-Fri 3/9 which we almost filled (ranges filled but we were a few ticks away from reaching Thursday's RTH close. Second gaps have a high probability of filling, and third and fourth gaps even higher. I know there are folks that are short out there that are counting on filling that gap up from 1346.25 we left behind on last Wed., but I would think it is a very high probability that we would at least fill the gap up from Monday's RTH close at 1365.25. I think that would be a pretty conservative target, but I'd be surprised to see us arrive at the station ahead of schedule, i.e., before we suffer through options expiration. Good trading, and good luck everyone, and ain't it a wonderful market. "To the Moon, Alice."
That's a very good question! I wish I had an answer as good as the question! Basically it's too things, but at best it's an educated guess. One is rate of the rise and the other thing is where do you expect the stop orders to be congregated. It just comes from years of experience and knowing where the strong resistance is if its shorts covering or the strong support is if it's going to be longs bailing. When the market hits a big load of stops these orders become market orders --it's like get me out at any damn price! That really accelerates the rate at which price rises. If you were say an institutional buyer trying to fill a big buy order would you dump it on the market all at once like that. I hope not, because you'd suffer a big adverse impact cost and end up buying at a higher average price than you should have. So those kinds of orders usually take a little longer to play out. In the present case we had the top of a long established channel above which there should have been a shit load of stop orders. What these damn algos do is if they somehow know there will be enough stop orders above them to take them out of their long positions when they get up there, then when they get withing shooting range of where the stops are located they'll just start buying all the resting sell orders between where the market is and where the stops are located, and they'll gobble up any market sell orders that come in too. This will move the market up to where the hapless stops are lounging around and then BLAM!!! the stops will be triggered as market orders, and buy all that shit from the Algos that bought up the market and moved it up there. So no the Algos are taken out of their long position by selling to the loser shorts who are now suddenly buyers at the top, just exactly where you don't want to be a buyer. The Algo's on the other hand have been buying all the way up and now they get to sell at the top. Life sucks sometimes if you're short! All bet if we asked that nice mister Blankfein, who goes around doing God's work, how to know how many stop orders are where and how much we have to buy to get to them, he could tell us right off.
I think this was the most important news. Imo, banks have been chomping at the bit to do this. And since were offering up opinions. Dimon is the man to watch. every now and then this guy is putting out little barbs or push backs against Fed policy.He is going to emerge as a WS leader in the sense that, you can watch some old time firms go down the tubes (leh, bsc)and he ain't going to let that happen to JPM. Historically JPM saved the Feds ass years ago and he's probably going to do it again.
Re the NY time opinion. "J.P. Morgan CEO Jamie Dimon told employees to resist taking advantage of competitors and to focus instead on strengthening the bank's own standards,"