Market Manipulation Madness

First of all, today's revised GDP is at consensus, so there's no biggie there especially considering it's nearly April. Last night however, RIMM's earnings call didn't go so great, their down over 10%. Sometime around then, this neat little note was released on Zero Hedge.

Someone Leak Something?

Something rather disturbing from a European trading desk...

TODAY TWO LARGE MACRO FUNDS OVER HERE HAVE GONE WILDLY LONG S&P. NOT LONG. WE TALKING 250% NET LONG. IT LOOKS LIKE CONCERTED ACTION ON GDP DGRADES FROM GS AND BOFA ARE THE LETTER DELIVERED TO BEN ON QE3. HUGE DIRECTIONAL BET WITH NEW CAPITAL PUT AT WORK. MOST LIKELY THE TWO INSTITUTIONS ARE COORDINATING ACTION WITH OFFICES IN CONNECTICUT. CHECK INFLOWS OF BLUE CHIP HEDGE FUNDS IN JAN FEB. APPLY 2.5 LEVERAGE. WE ARE TALKING ABOUT SOME 40-60BN PUT AT WORK PRIMARILY ON EMINIS AT THE MOMENT. WHETHER SOME EXTERNAL FORCE WILL LEAVE THEM HIGH AND DRY I DON'T KNOW. BUT IF ANYTHING SEEMED TO BE AT LEAST NOT TOO IRRATIONAL UP TO NOW, IN THIS THIRD WAVE, BE READY FOR REAL ROCK AND ROLL. 

I have to admit, the vernacular is a little strange a coming from a European trading desk, but it did its job last night pushing the ES contracts and the S&P to the 1340 area, well above our opening today. And, it seems quite a few people took the bait.

I really don't think there's too many institutional traders that would chase the S&P after a note like that and most importantly, IN AFTER HOURS where the liquidity is bad and the B/A is high. 

This looks like a real bag-holder trap and may be in part due to what RIMM looked like in after hours. In any case, it'll be interesting to see if today plays out as I thought it would per my explanation in yesterday's first post. If so, then you are getting a real feel for how the market works or rather how completely dysfunctional it is as well as a look at the Greed/Fear dynamic.