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goldminingXpert (28.77)

Understanding the Close Today



June 03, 2009 – Comments (20)

There was some confusion about what caused the rally at the close today. I repost my comments from another thread--the thread author posited that perhaps the "PPT (Plunge Protection Team)" caused the bounce. I argue this is unlikely:

GMX Wrote:

Nah, there was strong buying from the infamous #1 in the S&P futures pit at 2:45ET and then ~3:30ET that set it off. No need to make up conspiracies when the truth can be obtained. #1 was fighting GS and JPM who were selling the close, but the floor traders won the day.


In response to a question about who #1 was, GMX further wrote that...


#1 is no conspiracy. He's a floor trader that does big volume on the S&P futures exchange. He started bidding and the whole crowd of locals followed him. The PPT had nothing to do with this... if the PPT exists at all (which is entirely unproven--there is not one trade receipt that anyone has ever found from "the ppt") it isn't holding up the market at 920. If anything, the gov needs the market to drop to give treasuries a boost. As we saw, bonds rose sharply today as stocks fell. The PPT, if it exists, would be acting contrary to the interests of the gov. Therefore, we can categorically say that the PPT, should it exist, had nothing to do with the buying.

It hasn't been conspiracy the past few weeks either. Usually some big bank, often GS or JPM will start hitting the S&P futures ask for 100s of contracts within a few minutes of the close. All us bears see this and say, aw crap and cover. They buy enough to prop the market over key resistance level. When they want the market to decline, they do the opposite, selling the close to just under support. All this talk of PPT is the talk of people who've never closely watched the interactions of the futures market and the cash market.


20 Comments – Post Your Own

#1) On June 03, 2009 at 4:55 PM, StevesStox (< 20) wrote:

Just give it up already GMX! Since April 15th you were giving us 150 reasons why "the market was about to plunge," and so far you have been wrong. I apologize for being so critical, but I do it for your own good. Yesterday, you made a post entitled "I underestmated the stupidity of people," to justify your wrong prediction about market direction.

Let me get this straight; you say that if everyone else goes long when you are short, and you lose money while they take your money that they are the ones who are stupid? No disrespect but in that situation you appear to be the stupid one.

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#2) On June 03, 2009 at 5:07 PM, goldminingXpert (28.77) wrote:

from your comment, you clearly didn't read the blog post. Therefore, this video is dedicated to you:

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#3) On June 03, 2009 at 5:14 PM, FourthAxis (< 20) wrote:

@StevesStox - Dude, I'm showing your account to be about 2 months old.  Let's see how your accuracy is in a year.  2.  You could have longed the SPY ETFs and gotten more gains than you have.  3.  GMX's accuracy is about 86%, yours is 61%, and you'be been playing in one of the fiercest bull markets of all time.  WTF!?!  So try being a little nicer next time you have a "point."  

@GMX, where are you getting your specific info about trades being exectued by #1, GS, JPM, etc.? Thanks!

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#4) On June 03, 2009 at 5:30 PM, UKIAHED (32.14) wrote:

love the vid - rec from me just for that!  'tho I am interested in where you got the info on this #1 character myself...

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#5) On June 03, 2009 at 5:35 PM, binve (< 20) wrote:

GMX, LOL for the troll vid!

And I do buy your take on the EOD rally. Volume was pretty low overall today and it would have made it much easier for GS to accomplish this. Thanks man.

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#6) On June 03, 2009 at 5:50 PM, rofgile (99.34) wrote:


 Could you post how you got the information that there was a single trader who pushed up the market?  How could you see his buy order and trace it to him?


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#7) On June 03, 2009 at 6:10 PM, goldminingXpert (28.77) wrote:

Data originally came from a person who provides audio coverage of the action in the S&P pit all day. I'm not a subscriber to his service, but I know people who subscribe and report what's going on.

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#8) On June 03, 2009 at 6:11 PM, goldminingXpert (28.77) wrote:

Trader Audio:

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#9) On June 03, 2009 at 6:19 PM, rofgile (99.34) wrote:

Thanks much.


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#10) On June 03, 2009 at 6:26 PM, UKIAHED (32.14) wrote:

GMX - cool - thanks for the info

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#11) On June 03, 2009 at 6:57 PM, JibJabs (90.40) wrote:

Awesome video. To be shamelessly stolen for the indefinite future- hope you don't mind.

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#12) On June 03, 2009 at 7:57 PM, StopLaughing (< 20) wrote:

Hey Thanks GMX this was an informative post.

We dissagree on some things but you come thru with good info.

It hurts to lose but at least you had guts enough to go short at the wrong time. I almost went to cash just befor the GM bankruptcy as I figured it would drop  the market for a while. Glad I chickened out stayed in.

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#13) On June 03, 2009 at 9:12 PM, kstarich (28.81) wrote:

GMX- is #1 George Soros?

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#14) On June 04, 2009 at 8:10 AM, degaston (< 20) wrote:

There is a PPT. But you'll never seem them do anything unless some circuit breakers have been triggered and the market has collapsed well over 15% within a couple days. Initially all they'll do is teleconference to ask each other "what happened", have their people do some homework and then they'll closely monitor the market volatility to make sure there isn't any undue manipulation going on.

 Suppose that the Chinese, Japanese and Russian governments colluded with several Mideast sovereign funds to say "screw the USA". Without the circuit breakers and PPT they could easily take down the USA market 30%+ instantaneously. However the circuit breakers make such a instant massive panic move impossible. The market would halt and the Federal Reserve would immediately make sure that the Primary Dealers are flush with cash to go do some massive shopping once the halt stops and trading resumes. These sovereigns with several trillion in US-denominated assets combined know this and that's why they'd never be foolish enough to play this game. 

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#15) On June 04, 2009 at 10:48 AM, russiangambit (28.79) wrote:

>GMX- is #1 George Soros?

Funny. This is who I thought about too.

But in reality, who would have a couple billion to thrown in almost every other day at the close. There aren't that many hedge funds with this kind of money.

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#16) On June 04, 2009 at 4:11 PM, PedoBear (< 20) wrote:

The market is set to go down faster than my last conquest.

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#17) On June 04, 2009 at 5:07 PM, kstarich (28.81) wrote:

It's not George Soros.  GMX yeah he is known as #1.

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#18) On June 04, 2009 at 6:35 PM, bostoncelitcs (59.69) wrote:

If your "The Market is about to Plunge".....theory was correct......Wouldn't it have taken a huge hit after GM filed for bankrupcy the other day??  Today the Dow was up 75 points??

If CAPS players are going to try to "time the market"....I would suggest going to the racetrack and betting on horse running in  The Belmont Stakes this Saturday......your odds are better!!

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#19) On June 04, 2009 at 6:37 PM, nihilkillsmemore (20.15) wrote:

well person #1 could be anybody, who knows, an algo/stat arb computer.

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#20) On June 05, 2009 at 5:07 PM, kstarich (28.81) wrote:

Hey gang Wed was a pivotal day no doubt and #1 changed history!

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