Anatomy of a "RAID!"

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#1 Mon, Jul 11, 2011 - 11:21am
Dr Durden
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Anatomy of a "RAID!"

I'm just trying to understand in detail what exactly happens during the infamous EE "raid."

As an illustration, here's a 1 min chart of the silver smackdown that just happened. Interestingly, we dropped $1 exactly from $36.55 to $35.55 in 16 minutes.

What exactly is happening at the COMEX when something like this happens?

How many contracts does this correspond to? Is it possible to know?

How do the HFT bots factor in?

This is not a thread to debate whether there's manipulation, we're assuming this is pure manipulation. Rather, it's a technical analysis on how it actually goes down. 

Edited by: Dr Durden on Nov 8, 2014 - 5:09am
Mon, Jul 11, 2011 - 11:27am
lilbromarky1
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I saw the chart a few minutes

I saw the chart a few minutes ago and just laughed. I get paid on friday they can raid from now until then I dont give a damn.

Like my ideas? Check our blog at: https://backtobasicseconomics.blogspot.com/
Mon, Jul 11, 2011 - 12:18pm
HappyNow
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I agree

There isn't very much analysis shared on what exactly is going through the minds of the big bucks human traders when a raid is on. 

Questions like:

Can they tell it's a raid after, say halfway (or 50 cents in this case). Can they tell it's not just another normal volatility point. If so, how?

Can they see the HFT algos kick in along the way?

Can they recognize that there has been enough force applied to draw more algos in, and can they guess what the HFT's will do?

Would someone who employs HFT be able to read it early enough to capitalize?

Do some HFT's get burned just like real traders by joining too late or staying too long?

Swing trade indexed ETFs. Long physical gold, silver, and 1 miner.
Mon, Jul 11, 2011 - 4:18pm
snoochieboochies
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I've got an account at

I've got an account at Forex.com and it pretty much locks up when the EE does a raid and runs so slow that it would be almost impossible to do a sell without setting stops beforehad.

I'm a noob, please don't take anything i say as trading advice!!
Mon, Jul 11, 2011 - 6:34pm
Dr G
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Think of how much $ is

Think of how much $ is involved in a waterfall drop. It takes a lot to get a commodity to fall $1 in 15 minutes, even in a small market like silver. We are still talking LOTS of oz of silver, which = lots of $ through contracts. It really is astounding to think about, especially when it occurs on Monday in a NY market where trading volume is heavy.

Mon, Jul 11, 2011 - 7:20pm
Dr Durden
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I think we all understand

I think we all understand that it's not the actual metal that's moving - it's paper derivatives that trade anywhere from 20 to 500x's the underlying physical asset (depending on who you ask and how they've done the math based on the BIS stats).

We also hear that our friend BM "floods the market with cash" which I can dig, but have no idea how this actually goes down and how it can be done so quickly, seemingly whenever they want and with such precision. 

Is this something we can figure out if we go back and read Harvey's report for the day?

Got GIABO? "It's called the American dream, because you have to be asleep to believe it." ~George Carlin
Mon, Jul 11, 2011 - 9:37pm (Reply to #6)
pailin
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Raids are ez

Dr Durden wrote:

We also hear that our friend BM "floods the market with cash" which I can dig, but have no idea how this actually goes down and how it can be done so quickly, seemingly whenever they want and with such precision. 

I was, until recently, trading the waterfalls with pretty good precision. It's not all that mysterious.

The raid isn't the downdraft, it's the PUSH at the end that breaks through the support and hits all the stop/losses underneath. That's the waterfall effect because there aren't any more bids until near the next support level, either minor or major. THEY know where the stop/losses and lower bids sit because they can see those limit orders sitting out there. Many of those orders come from their own buy side customers (sadly). The play is some negative news comes out, or the natural see-saw of any market occurs then the raid is the final push on huge relative volume to break through. They don't control the whole thing, just the grand finale. It's all about running those big gaps to create panic. If you're trying to trade it, you just wait until they break through and then -patiently- wait for the stop/loss triggers to exhaust themselves. Made a lot of fiat doing just that until the whole Dodd-Frank enforcement of OTC metals things was announced a few weeks back.

To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything. -Edward Abbey
Tue, Jul 12, 2011 - 2:00pm
Dr Durden
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Good stuff, palin. Ok, so

Good stuff, pailin.

Ok, so what the hell is this, now? An UNraid? This time with gold. Again, out of nowhere we get a perfect $10 shift in 15 minutes...

Dudes, WTF?

Got GIABO? "It's called the American dream, because you have to be asleep to believe it." ~George Carlin
Sat, Jul 16, 2011 - 6:00am (Reply to #7)
Ernie Pantusso
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thanx pailin

pailin wrote:

The raid isn't the downdraft, it's the PUSH at the end that breaks through the support and hits all the stop/losses underneath.

That's the waterfall effect because there aren't any more bids until near the next support level, either minor or major.

THEY know where the stop/losses and lower bids sit because they can see those limit orders sitting out there. Many of those orders come from their own buy side customers (sadly).

The play is some negative news comes out, or the natural see-saw of any market occurs then the raid is the final push on huge relative volume to break through.

They don't control the whole thing, just the grand finale.

yes

a 100 ht post indeed

Mon, Jul 18, 2011 - 1:16pm (Reply to #9)
Woody Mornings
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[quote=Ernie

[quote=Ernie Pantusso]

[quote=pailin]

"THEY know where the stop/losses and lower bids sit because they can see those limit orders sitting out there. "

Is this true?

Mon, Jul 18, 2011 - 1:45pm
silverbleve
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Durden

I think this might be helpful:

https://tfmetalsreport.blogspot.com/2010/11/anatomy-of-ee-attack.html

Of course the methods of the attacks have evolved since Turd posted that, used to be much more clean cut. For a long time my strategy was buy at the open of NY trading hours after whatever dip they could muster and then sell in asian hours the same day.

Also, and I don't know how true this is now but the raids always had three legs down with a pause between each leg, my guess was they did this to see if each leg instigated a natural selloff so the next leg would gain as much momentum as possible. Of course, jmho. 

Right now there seems to be solid buying at any dip, and what I see looks like mere attempts at raids with no effective dips to buy. Watching and waiting..

Tue, Jul 19, 2011 - 10:57pm
Dr Durden
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^^ Very helpful, thanks

^^ Very helpful, thanks bleve.

I guess I'm still struggling with the specifics, though. Help me dissect this...

Quote:
The EE compiles a bunch of new, paper short orders and then they wait. They watch the order flow. They see an opportunity when there is a momentary lapse of bids to buy. They seize this moment to overwhelm those bids and the market is quickly driven lower as it seeks buyers to fill all the sells. Very simple and very fast.

Are they selling silver they don't have or buying orders on the short side so no one else can?

Man, this is confusing.

Got GIABO? "It's called the American dream, because you have to be asleep to believe it." ~George Carlin
Wed, Jul 20, 2011 - 2:08am
snoochieboochies
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Brotherjohnf on Youtube made

Brotherjohnf on Youtube made a comment on the raid last night:

Silver Update 7/19/11 - Caught in the act

Somebody made a hell of a lot of money yesterday. 250 million ounces of Silver paper contracts sold in one minuite!!! What really suprises me is the amount of selling it too just to dip silver by approx $1.

I'm a noob, please don't take anything i say as trading advice!!
Wed, Jul 20, 2011 - 7:01am
Dr Durden
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Thx, snoochie. BroJ is a busy

Thx, snoochie. BroJ is a busy man these days. I just watched his latest video from yesterday last night and then he must have posted another one right after. I know he's discussed this before, but he does so many vids I cannot remember which one he did the "raid" analysis. 

Got GIABO? "It's called the American dream, because you have to be asleep to believe it." ~George Carlin
Sat, Jul 30, 2011 - 6:45am (Reply to #7)
Ernie Pantusso
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waterfall signals

pailin wrote:

I was, until recently, trading the waterfalls with pretty good precision. It's not all that mysterious.

Btw, you remembered me of those traders Maguire spoke about.

For sure you were not the only one who could read those waterfall signals

"Maguire told the CFTC how silver traders at JPMorgan Chase openly bragged about their exploits - including how they sent a signal to the market in advance so that other traders could make a profit during price suppression episodes. Traders would recognize these signals and would make money shorting precious metals alongside JPMorgan Chase."

Sun, Jul 31, 2011 - 12:03am (Reply to #15)
Dr Durden
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Ernie Pantusso wrote:For sure

Ernie Pantusso wrote:
For sure you were not the only one who could read those waterfall signals

"Maguire told the CFTC how silver traders at JPMorgan Chase openly bragged about their exploits - including how they sent a signal to the market in advance so that other traders could make a profit during price suppression episodes. Traders would recognize these signals and would make money shorting precious metals alongside JPMorgan Chase."

BrotherJohnF pointed this out in a recent video; ie silver telegraphing a raid in gold which happens minutes later. It's like they wait for the push, confirm the freefall and then repeat the same with gold minutes later. Almost like a secret market language they all know.

We can all visualize the upside down "horseshoe" pattern on the Kitco chart that's nearly identical from silver to gold. Happens nearly everyday now it seems. As much as it's disgusting to watch and I feel like I need a shower after, I have to appreciate the opportunity to stack the dip. Hey, that's a new term: STFD! 

Got GIABO? "It's called the American dream, because you have to be asleep to believe it." ~George Carlin
Wed, Aug 3, 2011 - 8:42am (Reply to #16)
Ernie Pantusso
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Dr Durden wrote: BrotherJohnF

Dr Durden wrote:

BrotherJohnF pointed this out in a recent video; ie silver telegraphing a raid in gold which happens minutes later. It's like they wait for the push, confirm the freefall and then repeat the same with gold minutes later. Almost like a secret market language they all know.

Describing the changes in the COT report released July 1 as “spectacularly bullish” for both gold and silver, Ted Butler observed that “Rarely do we see the reductions in speculative long/commercial short positions witnessed this week.” Those reductions also left him “somewhat in awe of how brazenly and collusively the commercials pulled off this recent sell-off rig job.” And he sees “The obvious takeaway here (aside from all the commercials behaving collusively) is that the commercials are all buying because they expect the price of silver to be higher in time. That’s what you should expect as well.”

https://silverandgoldcoinblog.com/2011/07/08/cot-takeaway-collusion-and-...

Maybe Butler is wrong. Collusion is not necessary when traders can read those signals

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