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Dr. Kris has two degrees from MIT because one just wasn't enough. Her life goal was to figure out the universe and having done that (at least to her satisfaction), she decided to tackle something even more difficult—the stock market. Applying the scientific method along with an insatiably... More
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  • Was Yesterday's Market Action In Coke The Real Thing? 2 comments
    Jul 20, 2012 3:10 PM | about stocks: KO

    Yesterday (July 19), CNBC reporter Bob Pisani noted interesting (in the suspicious sense) sawtooth patterns in a few stocks. One of them was Coke (NYSE:KO).

    Looking at yesterday's intraday chart of the stock, you can definitely see buying pressure on the hour followed by a large runup until the half hour where selling pressure forces the stock in the reverse direction.

    Coincidence? That's a tough possibility to swallow, although the action is not being repeated today. Perhaps a quant testing out a new algorithm..?

    (click to enlarge)

    Themes: unusual chart activity Stocks: KO
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  • Bob de'Long
    , contributor
    Comments (701) | Send Message
     
    The thing that makes it seem strange is the size of Coke, 2.25B shares with a MktCap of $173 billion. In one of my E&Ps with a $1B - $6B MktCap, it might be one of two major players.

     

    Still with 3000 stocks over 180 days per year we’d have 540,000 patterns per year -- lots of chance for strange looking patterns.

     

    Even the new algorithm thesis would require lots of cash.
    20 Jul 2012, 08:12 PM Reply Like
  • Dr. Kris
    , contributor
    Comments (336) | Send Message
     
    Author’s reply » Bob,

     

    Yes, I'm thinking the same thing...but to have three major stocks (IBM, MCD, KO) exhibit the same behavior over the course of one day is like placing a 100000-1 bet that Unrigged Markets will win in the 5th.

     

    From a Bloomberg article today:
    "We believe that the price pattern of KO, IBM, MCD and AAPL yesterday was caused by hedging of options by a computer algorithm,” and “It was likely an experiment in automatically hedging large option positions with a time- weighted algorithm that has gone wrong for the hedger.”

     

    That, or SkyNet is becoming operational.

     

    Dr. K
    21 Jul 2012, 04:11 AM Reply Like
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