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Financial Select Sector SPDR Message Board

arsaxe 10 posts  |  Last Activity: Apr 14, 2014 10:31 AM Member since: Nov 20, 2008
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  • These guys just love to break price trends either upside or downside. They don't need stability. The will do everything to drive volatility back into any market niche.

  • It does not matter if a business reports better operating results. It does not matter if investors buy assets on sentiment shift. In such unbalanced and undemocratic market HFT still outruns any investors or traders who are not able to operate at astronomic speeds.

  • I doubt strongly that investors will sell before companies announce their operating results and forecasts. It is just bad timing for business investors to sell on speculative expectations before they get a word from companies. It seems that much of the selling is done by ETF traders and investors who do not want to hold oversized portfolios rather than individual stocks. And ,of course, we have our old "friends" in high frequency world who compete for order flow pumping liquidity volumes and rushing to trade on ETF selloff both in it and individual stocks it represent. I was always against ETF as such products reveal too much information to their operators about how ETF investors and traders act on certain market and economic developments. There is no evidence that these ETF operators do not capitalize on such information revealing it to their tinstitutional trading desks or funds they manage. ETFs are simply legalized insider trading vehicles although they have some benefits to market timers.

  • Reply to

    Soro bought big into Citi , JPM

    by topinvestgun1 Feb 15, 2014 4:19 PM
    arsaxe arsaxe Feb 15, 2014 6:08 PM Flag

    When Soro gets involved into anything expect spike in volatility. I think the fund was actually behind the stock price run to 55 and when they missed, it got out plummeting the price. I don't know whether such activity benefits investors. Soros himself pointed out many times that volatility is the real tool how hedge funds make money. This time they definitely missed to make fast money. Something went wrong for them.

  • Reply to

    The investor selloff is over

    by arsaxe Feb 3, 2014 2:37 PM
    arsaxe arsaxe Feb 3, 2014 7:22 PM Flag

    I know it is hard to persuade you guys because your mind works the way market flips over. I am positive that if the market landscape was different than we have now we would not have such anomalies. In the first place, it is hard to see why the market reached such high flying status anyway. Citi should have been trading below 50 in any case until they clean up their balance sheet. What is surprising the way market goes up and down. Any move is fast and brutal. Take a look at long term VIX chart. If somebody tells me it's random then he has to explain why every time spike in volatility is so crowded and periodic. A random chart should look differently. I dont blame emerging markets for the recent selloff. They have issues and investors should adjust their portfolios. However, the magnitude, speed and synchrony of such declines should be most likely attributed to activities of large institutional funds which are managed by Wall Street firms and equipped with trading technology that most independent investors don't possess. I sold my Citi holdings when I got disappointed by quarterly results. I knew that it would go down but I had no idea that it would go down that much and that fast.

  • There is no doubt that many investors maybe willing to buy at current levels as the Citi's stock trades at prices showing there has been no progress at all. Yes, C missed 2 quarters in a row but YvY there is a progress and better operating results. For the moment the market is not rewarding such progress as investors stay on a side. As long as machines correct the market for the trade down and given that thousands of automated trading platforms and algorithms keep tracking and correlating market and asset prices, there is little chance that investors decide to come back. Everything is being traded on corrective move in stock market. Volatility is back, and institutional computers handle such volatility the best way. Many individual stock charts show multiple daily minicrashes which the best way to identify high concentration of automated directional trading. Unless market stabilizes investors have to wait. So far, there is no sign of such stabilization. I am positive that emerging market fear as a trigger was nicely capitalized by some for the corrective move down. At least today we got some material poor economic news to justify such move that started out on speculative basis of crashing economies overseas.

  • Reply to

    emerging market concerns are definitely overblown

    by arsaxe Jan 30, 2014 3:35 PM
    arsaxe arsaxe Jan 31, 2014 2:50 AM Flag

    First, when emerging contagion arises from speculative capital outflow by funds investors should not be worried. The problem is when local authorities are in pursuit of risky local monetary policies or there is a sharp deterioration in economic fundamentals. But how do you know what policies are being run by governments in such countries and what measures they are taking. For example, I talked to my fried in Russia who works in the bank and he said that while everybody is concerned about russian ruble slide there is no panic in the bond and equity markets. The only thing that his bank anaysts are worried about is that Central bank does not provide smooth drift of russian monetary unit to fair value rather than allowing sharp and fast decline of national currency on investment fund withdrawals and active speculative acitivities of russian banks at forex markets. I do not think that crowded selling by investment funds can be a sign of rational activities. Second, when Citi talks about emerging market clientele, it was pretty clear that it was focused on urban customers with good credit and financial standing interested in global footprint particularly on institutional side. Why would such clientele all of a sudden show dramatic decline in their credit and financial status which should lead to deterioration in loan book for Citi as Mr. Bove described? When the financial crisis hit US most of banks were hurt by subprime segment. I doubt that given credit metrics trends on their presentations form last 4 quarters show that Citi is not efficient in managing the risk in their international loan book. Finally, you are absolutely right HFT has nothing to do with fundamentals but it has a lot to do with the stock price. Here, we have not only conflict of interests but a dilemma. Stock price fell so much and so fast that it simply could not be only investor selling.

  • The emerging market concerns are overblown by many market specialists. Someone can not judge these markets by sharp fluctuations in local currencies, outflow of speculative funds and decelerating of momentum economic trends. I even do not understand how a lot of US stationed money managers and analysts comment on emerging markets when they have never been there. Similar mistake was actually done by Bill Gross when he predicted that US economy had decades of slow, flat or down US economy advising clients to stay away from stocks. US rates going up speculation is also nonsense as Fed officials said many times that tapering is not rise in rates and they would stay as long as unemployment exceeds 6.5%. and even if rates go up I doubt that #$%$ Bove knows exactly how this will affect business activity in emerging markets. Most likely he speculates on this from his general considerations rather than actual data.

    I am not advising to buy Citi shares but it should be clear to anyone with independent thinking that this might be an opportunity. Still, questions remain as management has not provided investors with any forecast that raises confidence in it's ability to hit their goals for 2015. Two quarters in a row of underperformance even in a challenging economic envrionment is too much. The management is supposed to show progress and better operating performance on a relative basis even in a challenging environment rather than collect rewards when times are good. This is why they are getting paid so much and being trusted by shareholders. Unfortunately, Citi has lagged behind peers.

    My primary concern here remains the market structure which is flooded with HFT and short term trading. Poor operating results and sharp volatility in emerging market currencies and equity markets was fair enough for fast traders to make money on shorting the weak industry member and on the back of selling from disappointed investors.

  • arsaxe arsaxe Jan 29, 2014 2:19 PM Flag

    I don't think that the stock is being crushed by emerging markets. It is being crushed by high frequency trading.

  • We are back to the market where institutional HFT will dominate for a while. It is the market where institutional automated trading networks will control every piece of volatility in bonds, stocks, currencies, commodities, ETFs, indexes, etc. It will be very volatile and unpredictable. I expect flow of complaints regarding HFT and strange market movements to rise again compared what we have had for a year or less.

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