The past two days have been extremely profitable for day traders.

I don't really think about the reasons why the market moved in such a way b/c they don't really have predictive value but I think the past two days are enough of a special case to warrant a discussion about why the moves have been so extreme the past two days.

I'm surprised there's no discussion here about this yet.

Some people are blaming algos, pension funds rebalancing, or straight up manipulation by the PPT (assuming a PPT even exists), etc. Honestly, I straight up do not know why and it's not like it really affects my trading in a negative way but I'm interested in what people much smarter than me like Fattails think about why the moves the past 2 days were so extreme.

I saw an interesting comment on reddit which could explain the sharp surge after 2pm EST today:

"A quick note about the mechanics of the NYSE might be helpful.

At the end of each trading day (4 PM), the NYSE conduct an auction on each and every stock. The closing price of the day is calculated from the results of this auction.

Many large buyers and sellers mainly trade via the closing auction. When you put money into a mutual fund, for example, they usually try to calculate the shares via the closing price of the day the next day. To make sure that they actually buy at the closing price, many funds will put in orders for the closing auction and not trade at other times.

To avoid any huge jumps in prices from normal trading to the auction, the NYSE will start publishing information about imbalances in auction orders at 2 PM eastern, so that people can start adjusting.

Today, the market bottomed and started soaring at precisely 2 PM. My best guess is that some pension fund or mutual fund is massively buying, possibly from retail investors buying the dip. My understanding is that if you dump a lot of money into Vanguard's S&P 500 index mutual fund (not the ETF), Vanguard will put in an order to buy in the closing auction the next day."

canoekoh 

The past two days have been extremely profitable for day traders. I don't really think about the reasons why the market moved in such a way b/c they don't really have predictive value but I think the past two days are enough of a special case to warrant a discussion about why the moves have been so extreme the past two days. I'm surprised there's no discussion here about this yet. Some people are blaming algos, pension funds rebalancing, or straight up manipulation by the PPT (assuming a PPT even exists), etc. Honestly, I straight up do not know why and it's not like it really affects my trading in a negative way but I'm interested in what people much smarter than me like Fattails think about why the moves the past 2 days were so extreme. I saw an interesting comment on reddit which could explain the sharp surge after 2pm EST today: "A quick note about the mechanics of the NYSE might be helpful. At the end of each trading day (4 PM), the NYSE conduct an auction on each and every stock. The closing price of the day is calculated from the results of this auction. Many large buyers and sellers mainly trade via the closing auction. When you put money into a mutual fund, for example, they usually try to calculate the shares via the closing price of the day the next day. To make sure that they actually buy at the closing price, many funds will put in orders for the closing auction and not trade at other times. To avoid any huge jumps in prices from normal trading to the auction, the NYSE will start publishing information about imbalances in auction orders at 2 PM eastern, so that people can start adjusting. Today, the market bottomed and started soaring at precisely 2 PM. My best guess is that some pension fund or mutual fund is massively buying, possibly from retail investors buying the dip. My understanding is that if you dump a lot of money into Vanguard's S&P 500 index mutual fund (not the ETF), Vanguard will put in an order to buy in the closing auction the next day."

it was a measured move by anyone bullish, I tested it out on the NQ assuming the others will be similar and this is a very typical event the only thing that is not typical is the amount of movement we are seeing. If you go back and look at any day that has a decent amount of movement up or down you will see that "normally" we pull bacl/rally to the 50% level, anyone looking for longs will be placing orders at this level and would msot likely be buying all the way up.

The NQ roughly moved 496 points yesterday ( wednesday ) this number might be +/- a little as I measured on my charts but any ways 496 dived by 2 = 248 subtracted that from the HOY and you get 6304-248 = 6056 the NQ turned at 6053.25, measured move and even with that report anyone trading that would most likely act faster then 21 minutes after it was dropped.

This is my 0.02 and I could be wrong but this is a common move and actually something that I will use when looking at HTF's

I may be wrong but it boils down to simple price action... could it have been manipulated ? Markets bouncing 6% in a day show signs of manipulation I would keep my bear instincts as we are simply having a rally back to the mean .


and no i did not trade this as I quit around 12:00 est


also with a very slow grinding morning one would have to keep an eye open for bullish moves, this morning was filled with whipsaws and very large candles which to me point to some resistances in the current trend ex: the morning p/b we had


this could be santa or it could be a dead cat looking to trap bulls who are extremely late to the party.


-P