Free Republic

Curious why few if any traders can actually execute any trades, whether buys or sells? The reason is that despite the relative calmness of the index prints, what is going on beneath the surface is an unprecedented wave of constant halt and unhalts as all stop levels were taken out, many in circuit breaker territory, making it virtually impossible for any matching enginge to, well, match buyers and sellers. Here is a sample:

<p>Even the top federal agencies in the country couldn't find a clear-cut cause that triggered the whiplash in the U.S. Treasury bond market last October 15. The conclusion came from a report published Monday by five federal agencies, including the Federal Reserve and Securities and Exchange Commission.</p>

A UK trader accused of contributing to the 2010 Wall Street "flash crash" has protested his innocence in court, saying he did not "do anything wrong". Navinder Singh Sarao, 36, has been charged with wire fraud, commodities fraud and market manipulation by the US Justice Department (DOJ). Mr Sarao denies the charges but was remanded in custody for the third time after failing to raise £5.05m in bail. His lawyers' request that bail be lowered to £50,000 was refused.

The Justice Department on Tuesday unsealed charges, and sought extradition, of a Brit who did day-trading in futures contracts from his London home. The Commodity Futures Trading Commission also filed civil charges against Navinder Singh Sarao and his company. Sarao was arrested in the U.K. over the charges relating to manipulation. While the government has alleged manipulation on at least ten different occasions, it is the activity on May 6, 2010, that will draw the most attention. The U.S. government says Sarao was engaged in what’s called layering, which involves making multiple, bogus orders that are quickly cancelled to trick...

A single algorithm which placed and then cancelled orders on the Nasdaq accounted for 4% of all quoted traffic in the US with no clear goal. An investor gives FRANCE 24 his insight into the mystery which has concerned market watchers. A single mammoth mystery algorithm has set alarm bells ringing for market regulators and players, and underlined the market’s vulnerability to technology and the woeful lack of regulation on algorithms. A single algorithm last week placed and cancelled orders on the Nasdaq accounting for 4% of all quoted traffic in the US. Not only this, it also accounted for...

Support broken as the dollar yen plunges to an all time record low. Everyone now watching the Nikkei to see if it opens. That the BOJ has not intervened yet is beyond ominous, and nothing short of a death sentence for the Yen carry traders.

Another Mini Flash Crash? Shares Of Apple Briefly Plunge At The Open Joe Weisenthal Sep. 28, 2010, 9:41 AM Another one. Shares of Apple lost $15 at the open, before instantly recovering two thirds of that. Yesterday shares of Progress Angry lost most of their value briefly. That SEC report on the big May 6 Flash Crash couldn't come soon enough.[snip]

NEW YORK, Sept 27 (Reuters) - Shares of Progress Energy Inc (PGN.N) were halted briefly on Monday on the New York Stock Exchange after trading triggered a circuit breaker, although more than 100 trades took place after the stock had moved enough to trigger a halt. Nearly 60 erroneous trades have been canceled, according to a Nasdaq representative. The halt occurred from 12:57 p.m. to 1:02 p.m. (1657 to 1702 GMT). The circuit breakers are triggered when a stock moves 10 percent or more within a five-minute period. However, based on Reuters time-and-sales data, the stock hit a threshold that...

Investor Fund Flows Have Never Been This Bearish Since Lehman Collapsed Vincent Fernando, CFA Jun. 6, 2010, 8:45 AM It's a bit of a surprise that stocks didn't fall further. The last four weeks were actually the worst 1-month outflows since Lehman collapsed in 2008, as shown below in red: From a fund flow perspective, investors in mutual funds have now pulled money out of U.S. stocks during 2008, 2009, and now year-to-date in 2010. To us this should be read as a substantial contrarian indicator. The investor panic was enormous during the last four weeks, and on a multi-year...

Above the Restoration Hardware in this Jersey Shore town, not far from the Navesink River, lurks a Wall Street giant. Here, inside the humdrum offices of a tiny trading firm called Tradeworx, workers in their 20s and 30s in jeans and T-shirts quietly tend high-speed computers that typically buy and sell 80 million shares a day. But on the afternoon of May 6, as the stock market began to plunge in the “flash crash,” someone here walked up to one of those computers and typed the command HF STOP: sell everything, and shutdown.Across the country, several of Tradeworx’s counterparts did...

How HFT Quote Stuffing Caused The Market Crash Of May 6, And Threatens To Destroy The Entire Market At Any Moment Submitted by Tyler Durden on 06/23/2010 16:16 -0500 Even as the idiots at the SEC mope about cluelessly, confirming they deserve not one cent of taxpayer money to fund their massively overbloated budget, and should all be summarily fired to collect tarballs in the Gulf of Mexico (and soon Maine), our friends at Nanex have conducted an exhaustive analysis (must read for everybody concerned about market structure), in which they identify the various parties responsible for the market crash,...

Martin Armstrong: The "Flash Crash" Was A WATERFALL Event Like The One That Preceded The Fall Of Rome Joe Weisenthal May. 18, 2010, 10:07 AM The famous market philosopher Martin Armstrong, who is currently in prison in Ft. Dix New Jersey, has turned his attention to the "Flash Crash" of May 6, which he sees as a profound event. He describes the event as a waterfall -- the opposite of a blowoff bubble top -- that presages the start of a profound shift in the world economy. He calls the "fat finger" or glitch theories nonsense, saying it's all about...

Waddell & Reed responds to 'flash crash' reports By Ben Rooney, staff reporter May 14, 2010: 4:30 PM ET /snip In a statement, Waddell said it was one of possibly 250 other investors trading the E-mini futures contract on the day in question. "On May 6, as on many trading days, Waddell & Reed executed several trading strategies, including index futures contracts, as part of the normal operation of our flexible portfolio funds," the firm said in a statement. Waddell added that such trades are used to protect investors from potential losses, adding that the firm is a "'bona fide...

Did Dow Actually Drop 1250 in 'Flash Crash?' On Wednesday May 12, 2010, 1:51 pm EDT The infamous "Flash Crash" of last Thursday where the Dow Jones Industrial Average (INDEX: .djia) lost as much as 998.50 points in a matter of minutes could have been much worse. The Dow actually fell 1,250 points if you calculate the average using the low prices for the day that traded away from the NYSE on other exchanges. This is not using the trades that were busted because they were 60 percent off the market, according to Lon Juricic, who ran the shocking numbers...

Federal investigators probing the “flash crash” that briefly sliced nearly 1,000 points off the Dow Thursday are zeroing in on a series of “unusually high-volume” trades in S&P futures that originated in Chicago, a government official told POLITICO. Those trades set off a chain reaction of trades that caused the biggest drop within a single day in the Dow Jones Industrial Average’s storied history.