The spooky season of Halloween looms large, so we have thought of the perfect way to celebrate.
In today’s article we are going to look at a few major incidents that occurred in the markets, suggesting some rather strange and mysterious happenings.
As we are about to see, even the stock markets are not totally impervious to weird malfunctions or even complete crashes, so without further ado let’s check out some times that ghosts got in the system (or ‘into the machine’) and wreaked havoc on the markets.
#1 Ghostly Goings-On in the Gold Markets
Precious metals such as gold, silver, and palladium have traditionally been looked at as safe and steady investment options.
Gold in particular has represented a fairly reliable sign of the health of the economy in general, with stable and consistent trading typically suggesting favourable conditions from a consumer and industrial standpoint.
Of course, living in an age of seemingly endless stimulus means that we have seen some rather interesting and out of the ordinary occurrences in the gold markets.
International banks such as JP Morgan have gone to great lengths in an attempt to manipulate the precious metals markets.
JP Morgan itself has been caught shortening silver in an attempt to stifle prices, while several banks have been found issuing certificates for gold and silver that do not even exist.
Although the gold and silver rallies of the past several years have declined and even reversed somewhat, it will be very interesting – if not a little frightening – to see what happens when the minimal physical holdings of these banks are exposed.
The ETF scans run by these banks will become more and more apparent as time goes on, so there is no doubt that we will see even more ghostly goings-on in the gold markets as the banksters attempt to cover their tracks and stem the tide further.
#2 Trading Natural Gas Futures on Flipped Signals
In 2011 there was a peculiar “fractal” natural gas algorithm which resulted in some very strange trading of Nymex gas.
“It’s almost as if someone is executing a new algorithm that has its buying/selling signals crossed,” said data streaming firm Nanex. “Most disturbing to us is the high volume violent sell off that affects not only the natural gas market, but all the other trading instruments affected by it.”
What appeared to be happening here was that buy and sell signals were flipped, causing a complete reversal of everything we know about fundamental supply and demand economics.
Nanex went on to state: “On June 8, 2011, starting at 19:39 Eastern Time, trade prices began oscillating almost harmonically along with the depth of book. However, prices rose as bid were executed, and prices declined when offers were executed –the exact opposite of a market based on supply and demand. This is highly unusual.
Upon closer inspection, we find that price oscillates from low to high when trades are executing against the highest bid price level. After reaching a peak, prices then move down as trades execute against the highest ask price level. This is completely opposite of normal market behavior.”
Whether this is a case of predictive trading algorithms attempting to get ahead of bid/ask signals or something more insidious is uncertain.
There is no doubt we are in an age of market manipulation where traders and institutions are trying to get ahead of the market itself, sometimes with truly ridiculous consequences!
#3 The New York Stock Exchange Goes Kaput
In July this year a so-called “technical glitch” caused the New York stock exchange to crash for 3 hours and 38 minutes.
The NYSE is due a full report on the crash, citing the malfunction of a new software update as the culprit.
The sheer scale of the American stock market makes it somewhat more susceptible to glitches due to just how complicated and fragmented the system is across its many exchanges.
Because of this, it is hardly surprising to see that this was not the first time the markets experienced issues such as this.
This was an example of market manipulation, with the S&P 500 dropping almost 9% within a matter of minutes, and a London trader ultimately being charged for his role in the events.
What’s more, in 2013 the NASDAQ experienced its own turmoil in the form of what is now known as the Flash Freeze, with software issues crashing the system for around three hours.
#4 Ever Heard of ‘Ghost Month’?
If you have never heard of Ghost Month then it is a period from August 14 that ends in the middle of September.
Ghost Month comes from Chinese culture and revolves around numerous superstitions which can actually have a fairly profound effect on stock prices and market behaviour as a whole.
Some people will warn you to steer well clear of heavy investments during this period, while others seem set on taking advantage of the potential market volatility that can occur.
This is very interesting because some spooked investors may be afraid to buy stocks during Ghost Month, potentially making it a period of great opportunity for those brave enough to run the gamut of such a superstition-laden month.
If you go all in during Ghost Month and see your portfolio dwindle then don’t be too surprised, but if you can stealthily sneak your way into the market you may be in a great position to sell at a higher price once Ghost Month is over and when signals return to some semblance of normalcy.
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