Precious Metals: 6 Degrees of Separation as HFT Goes Mainstream

6 degreesA recent 60 Minutes television show interview revealed the long established electronic trading mechanism used to front run and carry out price management and profit schemes across trading seconds. In the wake of the interview, one cannot help wonder how many degrees of separation exist between public awareness of this and its connection to futures and precious metals price manipulation. [Read more...]

Flash Boys: The Odds Are Never in Your Favor

Making money in the stock market is supposed to be about making wise investment decisions.  It isn’t supposed to be about finding a glitch in a video game and exploiting it.  But that is essentially what these high frequency traders have done.  They have spent an extraordinary amount of time and energy figuring out ways to make pennies (or sometimes just fractions of a penny) on the trades that the rest of us make.
Fortunately, this practice was exposed in front of the entire world by 60 Minutes the other night.  Steve Kroft interviewed a former trader named Michael Lewis that just released a new book entitled “Flash Boys” that is all about the evils of high frequency trading.
On Wall Street, there are winners and there are losers.  Most of the time, “the little guys” end up losing.
But at least they could try to have a system that at least has the appearance of fairness.  As long as high frequency trading exists, that will never be the case.

[Read more...]

Cartel Footprints, HFT Algos And Price Discovery Mockery: Just Another 24hr Period In The Paper Silver World

Jamie DimonSilver trading over the last 24 hours shows signs of a cartel capping, High Frequency Trading algorithms and actual humans going long.
Real accumulation started at the New York open today and yesterday, only to be met with a capping effort as the London PM Fix approachedwith today’s downdraft representing a classic smash down against stop loss orders, resulting in quick downward price spikes.
To most observers paying close attention to paper market silver trading, these shifts are old news.  But the stark contrast between these trading phenomenon over the last 24 hours are so clearly visible it’s worth pointing them out.
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Silver Goes Vertical

After trading in the shadow of Wednesday’s chart overnight and throughout the early morning, silver has just broken algo control with a vertical move to the upside.   After breaking below $29.70 in early trading, silver has just shot up .80 nearly vertically to $30.59.

Gold has also made a strong move to the upside, and is back into the mid $1660′s. [Read more...]