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Wednesday, April 03, 2013

PPT SERVING SOMEONE UP?

I have to give it up to Zero Hedge. I have no idea how he comes upon all this information throughout each and every day. I found this article quite interesting. It seems we now have a second "rogue trader." If you read through this article there are all sorts of things that might come to mind. There is one thing in particular that jumped out at me, 20%.


http://www.zerohedge.com/news/2013-04-03/how-28-year-old-ex-goldman-trader-who-accounted-20-e-mini-volume-blew

The nefarious relationship that exists between banks and the FED has been showing it's true colors over and over. One of my favorites is what has been called by some setbacks. Translated this is segregated fund money that the bank holding it somehow comes up with some BS reason as to why it is all of the sudden theirs to keep. Judges never wanting to be one upped by the next corrupt person kindly oblige them and let them steal the money. See recent fraud cases for more on this, I am not a lawyer but do know JPM is forecast to keep some of the PFG money through this process.

We see the banks constantly getting inexplicable favorable treatment in court cases. It is my allegation that the reason for this is there are some back door relationships going on that "we are not privy" to. It has long been alleged that the PPT does it's dirty work through Citi, GS and JPM. Is it a coincidence that the rogue traders caught "manipulating" the ES worked for those firms? Here is the bigger question, why is the CFTC allowing GS to exceed Large Trader position limits? They are not commercials, they should not be provided unlimited position sizes. Since positions have to be reported at the end of each day, why did more than 1 day go by before forced liquidation of some of a position like this took place?

It has been alleged by me that the big run in Crude Oil was caused by the CFTC allowing commercial status of large commodity funds where they could push price to ridiculous levels. If you look at the COT report during the huge Crude rally in 2007-2008 the commercials had a monster long position right at the top! That would not likely ever happen with true commercials who are hedgers. It was pointed out by me and many others more prominent, that something was amiss with that situation. Now we fast forward again to this bizarre situation.

There are all sorts of possibilities and I have no proof to make a case on any of them. I do find it curious that he apparently was only a long side trader. Anyone who trades knows you can make money faster in crushing the market with a short position. If his sole goal was money why didn't he play both sides and bully in both directions? Might there have been another reason? Might there be a back door deal already struck here? I would love to say we should have an investigation but we see where those all go. At this point it would only be truly investigated if all guilty parties were Republicans. If there was one democrat anywhere that would be implicated Holder won't do anything as we know. Let's hope this guy is a Republican, maybe he will spill the beans if there are any to be spilled. I will just leave this commentary with the following thought, I think there is a heck of a lot more to this story than we are ever going to find out.

The following chart speaks for itself.




It certainly appears the free fall is beginning. I am sure Fib guys have a Christopher Columbus type of navigation chart drawn showing the magic numbers this will stop at. If it breaks through the 1538 level and closes below it, I see nothing anywhere on this chart that is even a target. This means the target if you are short is $950 or lower since the chart only goes that low and there is nothing even there to zero in on. I am going to be sad not happy to see people get cleaned out on this one if it progresses like I have said all along it would, really sad. It is not over quite yet 1538 at press time is still holding.

I am pissed at myself for not being short the Russell, but catching this was not easy. I did say that was where to play so hopefully some of you caught this. We have caught it being long interest rate contracts but we should have had this also, bad judgement call by me.

Good Trading

6 comments:

Pacavany said...

Chris,
JPM is the "House that Morgan built" and based on all I have read they are the FED's bank and have advance word on FOMC notes etc. JPM is also the #1 short in both golad and silver futures and has been since they took over the short position of Lehman on their demise. What I have read claims the CFTC treats them as "commercials" because of the size they trade and because they are a bullion bank for one of the
big metals ETF 's (can't recall which one, maybe SLV)
Don in Virginia

JPA said...

Hi Chris. YOu have a great blog. A lot of thoughtful and great ideas. Did you see what happened to the Yen and the Nikkei last night? WoW.

By any chance I tried to find the tools you use to analyze systems but I can't seem to find them. I searched your blog, and I found them to be tradestation and genesis. I tried searching for genesis but it seems that there are multiple genesis products out there. Do you mind sending me a link and the product name? Thank you so much.

- JP

Chris Johnston said...

Don you may be right we know they and GS get commercial position limits and they should not, as my dad says

That's Horseshit

JPA I use trade navigator platinum from Genesis

jason said...

I love your comment about Republicans and Democrats. Just goes to show how much the media can control the clout of public opinion. God forbid a democrat ever does something really wrong that the media HAS to cover it and half the country has a heart attack from shock.

PD Quig said...

The Russell should give you another chance to short at 928-930.

PD Quig said...

Well, there's 930 on the Russell. Pathetic volume on it today until the close. My method says I don't short it here. At the very least I'd want to see a pullback from 934.5 and a failed retest. It could easily hit 938.5 now...or even 945.7 unless earnings trip it up.