I IS TIME TO DO SOMETHING ABOUT THIS
I was trading emails with a close friend and fellow trader yesterday during the last hour of trading, and once we hit 12:20 PST I sent the following email. "Here we are it is game time, perfect setup for the PPT to buy this." I am not sure if even 30 seconds passed before the ES moved up pretty sharply for a few bars. My next message was "In a democracy this should be illegal."
There was a time I talked about his often in here, but over the last several months we just have not seen as much of this as we used to mostly because the market has just gone ever upward. There were no days that needed to be saved. I really could care less which way the markets move, I just want free markets. Like most people, I am not a big fan of interventions by governments. When someone like me can watch a screen and type an email like that almost to the second of when the futures have a mystery rally, you know someone is not right. I admit that I do not trade the ES or stock indexes that much anymore do to all of the shenanigans that go on.
There is also something else I need to make clear. Manipulations are not responsible for every late day save, or for that matter every rally on down days. There are natural ebbs and flows to markets, and when prices get extended reversions happen. This is statistics 101. Everyone except Gold bugs accept statistics. Statistics don't apply to Gold they will tell you because of ....... it can go up forever on it's own. With all of this aside, once you watch markets enough, you can tell when there is a buy program that makes no sense at all. It comes out of the blue when the premium is not out of line, nor are any of the other stats that signal when institutions initiate these.
If you look at the chart above, I have marked when around noon on days when the ES was net minus for the day, what happened in the last hour. You can see 5 of 6 days rallied nicely, one did not. I think we have all seen that in spite of all the complaining we are doing about our government and what they are doing to our country, they march on trying to take more and more control. At this point, if you can't beat em join em. We know they are going to either directly buy futures on these days at these times, or do it through intermediaries like GS and Morgan Stanley, so why don't we just tag along and pick up a few shillings for the trouble?
My project for the weekend is to study these late day saves that constantly happen and construct a mechanical method to trade them. My plan is just to check in at noon, see if whatever conditions I find to be the most consistent are in place, then take the trades. This is a different type of approach than watching a MACD or some other tool or group of them all day long trying to trade every wiggle. That is exhausting and not the way to make big money. You can grind out some money doing it but it is such a pain in the rear.
Most software programs will allow you to designate times intraday to program systems, so that is my starting point. One thing I like to do with trading as everyone knows, is back a daily trade with a fundamental condition. I feel this makes the trade better conceptually, and more likely to work and move more in the desired direction. This is difficult to do with intraday trading, fundamentals typically don't influence 5 minute charts. However, I would have to say now that the PPT is a fundamental. They have been operating in the markets for many years, and have become much more active on shorter time frames. The reason is irrelevant, although you can bet your sweet ... there would be hell to pay if they were launching sell programs and not buy programs.
At this point I am not sure where the research will lead whether it be to certain days of the week, days of the month? Possibly a different optimal time to buy than noonish? I suggest for those of you who like to day trade that this might be something worth checking into. We have an intra day fundamental, the government interventions on down days, lets quit fighting it, quit complaining about it, and take advantage of a government handout.
Have a good weekend