The last couple of hours across in today’s markets were quite surreal for many cross-asset-class traders. As the following chart shows, the “need” for the S&P 500 to achieve 2,000 (and green post-FOMC) was evident in a 3-step process of manipulating VIX, USDJPY, and Gold. All they could achieve was 1,999.79 highs but not without an epic last minute VIXtermination effort…
Post-EU Close, stocks had started drifting lower… that will never do… So, enter “The Manipulators”
Goal: S&P 500 to 2,000
Begin…
Step 1: Sell VIX (VXX or VIX futures most liquid and/or use dark pools to hide the volume) – S&P 500 starts to rise..
but the momentum does not hold..
Unleash Step 2: Another VIX slam but throw in some JPY jiggery-pokery just to see if we can ignite the momentum and run those 2,000 stops…
Yep – that worked… any minute now…
Oh wait, it stalled at 1,999.79…
Step 2a: Try selling gold… that should keep the rally alive…
Nope… ok… last try…
Unleash the JPY – Step 3: RUN USDJPY through 109, take out stops and that shouldbring S&P to 2,000 and beyond…
We are losing it Jim… I cannay hold it
Step 3a… dump it, dump it all – VIXtermination at the close but stocks have folded by then…
Mission Unaccomplished… close but no algo cigar today.
Charts: Bloomberg
via Zero Hedge http://ift.tt/Y5mSAY Tyler Durden