Financial topics

[Higgenbotham]

This might go without saying, but the SPX topped at 2872, 72 points over 2800 and guess where the futures closed earlier today? 72 points under.

[Higgenbotham]

When the ES futures opened back up tonight, the most orders were at 2728 but those orders never got filled before the futures moved higher. What the market is therefore telling me now is that it is leaning toward visiting 2800. But markets can be misread or change their minds.

[John]

So the blue numbers are buy orders, and the red numbers are sell orders?

[Higgenbotham]

So the blue numbers are buy orders, and the red numbers are sell orders?

Yes, and the last trade was one lot at 2730.50. The market book goes 10 layers deep either side of the last trade.

Also, the bots usually like to hit the big blocks of orders at night and drive the market a bit under, but tonight they didn't do that at 2728.

[John]

So if you add up the blue numbers you get 391, but the red numbers add
to 250. That means that a lot more people want to buy at lower prices
than want to sell at higher prices. Since more people want to buy
than sell, that means the price will go up. Right?

[Higgenbotham]

So if you add up the blue numbers you get 391, but the red numbers add
to 250. That means that a lot more people want to buy at lower prices
than want to sell at higher prices. Since more people want to buy
than sell, that means the price will go up. Right?

In a free market, generally yes, and I look at that, but there are a number of qualifiers. One, I believe the big banks just got caught spoofing and were fined, i.e., fake orders. So it's important to watch the volume to see if the orders were real and to also see to what extent people are not tipping their hands. I very rarely tip my hand. In others words, I place orders in real time so they don't appear in the book. Say I want to sell at 2733. I wait until the real time bid is 2733, then hit the button. Another aspect of that question is if the market is heading down there will be fewer overhead orders because they were more recently cleaned out.

A lot of times market action is dictated more by how aggressive buyers or sellers are when they go to the market.

Generally, a large block of orders may mean a large player is taking a longer term position. I've seen some very large blocks get filled near the end of a panic but not at the end. Therefore it's often a short term indication the market has further to fall but a very large player wants to ensure a longer term position.

[aeden]

time to sleep my bears - will sell into the melt up - will built some short - as t noted the two year is near record cover -
- not even going to consider when it breaks the back of the sp500 since the double book was Luca Pacioli creation and
Luca a Franciscan monk was living with Leonardo da Vinci and was his math teacher.

[Higgenbotham]

The market came down toward 2728 and it looked like the buyers moved their orders lower. I bought 1 at 2729.50, 1 at 2927.50, then sold both at 2729.50. They don't make this easy.

Here is the chart of that activity:

[Higgenbotham]

time to sleep my bears

I'm not inclined now but you know what I'll be looking at near term.

[John]

I bought 1 at 2729.50, 1 at 2927.50,
=>
I bought 1 at 2729.50, 1 at 2727.50,