The Role of the Market Maker

There have been a lot of discussions across social media, especially Twitter, that give a market-maker improper credit for manipulating stocks, futures and cryptocurrency markets. It’s important not to confuse the role or exchange function, with a trading strategy. A market-makers role is to..well, make a two-sided market, otherwise know as the “bid ask” spread. Here is my first draft attempt to explain the various roles and workings within the historical context of professional traders at a regulated Exchange. Not all of these descriptions carry over to the world of unregulated Exchanges. Opinions are my own and this article is for informational and entertainment purposes only. The Players CBOE OEX options pit circa 1996 Yellow arrow is me FLOOR TRADERS / MEMBERS House Brokers Color: Red Compensation: Salary + Bonus Loyalty: His Employer Brokerage firms like Schwab, Merrill Lynch, Goldman, Chicago Corp., etc., hired personnel who took the membership exam and became floor brokers. House brokers are salaried employees of the firm and only executed or represented orders for the firm that employed them.  Mistakes and improperly executed orders were placed in a trading “Error Account”. Neither too great a gain; nor too large a loss was desirable.  At the end of a year, if a house brokers error account was “net zero” P&L or slightly positive, he was okay with that. The house brokers did not keep gains, nor were they penalized if there were reasonable losses.  Too large a loss would get them fired.  The Firm took all the risk, so the Firm kept gains if any, in the error account.  Active pits like the OEX, S&P...

6 “Begin Again” Steps to Protect Your Standard of Living in the Next 5 Years

Observations. You’ve heard me say on previous occasions, that stock market declines provide a great buying opportunity. We get a chance to buy value, just as if your favorite food item is experiencing a Manager’s Special on sale at your favorite store. You’ve heard me say on previous occasions, the stock market is “rigged to go up”, because entrepreneurship, efficiency, and inflation protection are embedded within its economic pricing model. This is still true, but a 32 P/E ratio has me a little worried. (1.) You’ve heard me say on previous occasions that gold and silver are the worst long term investment ever invented providing barely a 1% per year return since 1980. “Rat poison squared” to coin a popular phrase. But even a stopped clock is correct twice a day. WHAT CAN GO WRONG? I’m temporarily issuing a “yellow light” since we’re 9 years into this economic recovery with interest rates still at historically low level rather than somewhat higher rates. Agricultural commodities grains like corn, wheat and soybeans are at the same levels in some cases as they were between 2005 to 2013. We bring to your attention the following; Passive index investing has gained tremendous popularity is distorting valuations Amazon, the world largest retailer $ 763 billion in size has a P/E ratio above 250 (2) The top 6 holdings in the S&P 500 (symbol: SPY) at the time of this writing, are Apple (3.71%), Microsoft (3.19%), Amazon(2.79%), Facebook(1,82%), J.P. Morgan(1.65%) and Berkshire Hathaway(1.65%). The problem is the top holding for Berkshire Hathaway at 22% is Apple Computer! (3) Uber, the world’s largest ride sharing provider...

# Cryptocurrency Weekly Overbought / Oversold Ranges

Widely held cryptocurrencies are smack dab in the middle of their statistical “bell curve”, with only Litecoin being a touch oversold on a weekly basis. We expect cryptos to spend a few weeks digesting news and investor / speculator positions with no real rhyme or reason. Mining profitability has increased a little, but still has us wondering if there aren’t other ways of monetizing proof of work (PoW) or proof of stake (PoS)?             We do not currently see strong demand for cryptocurrencies, as much as we believe supply held by weak hands has been exhausted at this time. While cryptocurrenies are fun, exciting  and sexy, Cenacle Capital can invest your IRA or 401(k) in the Enterprise value of blockchain stocks. We believe this is the best long term strategy to take advantage of this technology. We believe 80% to 90% of current cryptocurrency utility tokens will ultimately fail, leaving companies like IBM, CSCO, JPM, CME Group and others to survive and thrive! These are the dominant companies in their industry and have the resources at their disposal to pivot and find revenues and efficiencies smaller companies can’t. Contact us at info@cenaclecapital.com to learn more, or click HERE Not investment advice. Cenacle Capital owns positions in Bitcoin, Ethereum and other digital tokens. For educational / advertisement purposes only. Please read our disclaimer at...

#Crypto Intermediate Trading Ranges

Weekly Overbought / Oversold Ranges Selling pressure has slowed and “HODLR’s” are seeing demand for #crypto tokens, as speculators and investors have witnessed attractive gains in the last 2 weeks. As #crypto currency miners, we almost turned off our GPU mining machines because profitability was near an all time low! I believe selling pressure has slowed, relieving intense downward pressure. Nothing really interesting has caused token to increase in value. As a former corn option trader at the Chicago Board of Trade we understood there were two types of markets. Demand driven Supply driven We do not currently see a demand for cryptocurrencies, as much as we believe supply held by weak hands has been exhausted at this time. While cryptocurrenies are fun, exciting  and sexy, Cenacle Capital can invest your IRA or 401(k) in the Enterprise value of blockchain stocks. We believe this is the best long term strategy to take advantage of this technology. We believe 80% to 90% of current cryptocurrency utility tokens will ultimately fail. Companies like IBM, CSCO, JPM, CME Group and others in our opinion will not only survive but thrive! These are the dominant companies in their industry and have the resources at their disposal to pivot and find revenues and efficiencies smaller companies can’t. Contact us at info@cenaclecapital.com to learn more, or click HERE Not investment advice. Cenacle Capital owns positions in Bitcoin, Ethereum and other digital tokens. For educational purposed only. Please read our disclaimer at...

Top 3 Crypto Trading Levels

Weekly Overbought / Oversold Ranges for the week of April 15 -22, 2018. We report the conditions of a simple moving average overlay, taking volatility into consideration. In other words, stocks, bonds, & commodities trade back and forth like a pendulum on a grandfather clock. How big the “arc” of swing, is the annualized volatility.  It’s very similar to Bollinger Bands. Ethereum  -58% oversold Bitcoin at -28% oversold Litecoin -46% oversold Selling pressure continues with many different opinions for the cause.  All tokens continue to trade in OVERSOLD condition.             Learn more about investing in the Enterprise value of Blockchain stocks at: https://lnkd.in/eBbVFEX Not investment advice. Cenacle Capital owns positions in Bitcoin, Ethereum and other digital tokens. For educational / advertisement purposes. Please read our disclaimer at...

Ethereum Weekly OBOS levels

Weekly Overbought / Oversold Ranges for the week of April 1 -8, 2018. Moving Average overlay on mean reverting standard deviation taking volatility into consideration. In other words, stocks, bonds, & commodities trade back and forth like a pendulum on a grandfather clock. How big the “arc” of swing, is the annual volatility.  It’s very similar to Bollinger Bands. Ethereum is -92.25% oversold compared to Bitcoin at -52% oversold. Selling pressure continues with many different opinions for the cause.  The token is trading closer to OVERSOLD Perhaps it’s tax selling? Lack of ICO’? Statements by Vitalik? Nobody knows for sure.This is why we feel US stocks and ADR’s seeking to monetize blockchain is a better, long term approach than holding crypto. Learn more about investing in the Enterprise value of Blockchain stocks at: https://lnkd.in/eBbVFEX Not investment advice. Cenacle Capital owns positions in Bitcoin, Ethereum and other digital tokens. For educational purposed only. Please read our disclaimer at...

#Bitcoin & Litecoin Weekly Overbought / Oversold Ranges for the week of Jan 21-28, 2018.

We’ve Added Litecoin! Weekly Overbought / Oversold Ranges for the week of Jan 21-28, 2018. Moving Average overlay on mean reverting standard deviation taking volatility into consideration. Very similar to Bollinger Bands. Learn more about investing in the Enterprise value of Blockchain stocks at: https://lnkd.in/eBbVFEX Not investment advice. Cenacle Capital owns positions in Bitcoin, Ethereum and other digital tokens. For educational purposed only. Please read our disclaimer at...

FEI Professional Development. January 18, 2018

Financial Executives International Professional Development series on Bitcoin and Blockchain, by Bill Ulivieri. January 18, 2018. Oak Brook, IL Available Upon Request http://myemail.constantcontact.com/FEI-Chicago-Chapter-January-Newsletter.html?soid=1102445029159&aid=ZgNikNYv9rE...