This is not the first time we have seen this sort of behavior in electronic markets.  But, it is very questionable behavior.  And, it brings to light the question as to how well electronic markets actually function.

Here is a view of this chart from an electronic broker:

And here is another view through another data vendor:

As I say, this is not the first time.  The last time it was a downward spike in the US Dollar Index.  It was within the past 6 months.  I’d show it to you on my charts, but, of course, it’s all been cleansed out to make the charts look pretty.  But, I remember it vividly because I was actually long dollar then.  And, in about five minutes on a Sunday, I was in extreme pain, as my charts indicated that the Dollar had made about a 3 month move in five minutes during a time I was vulnerable, I was manually entering stops on a daily basis that week.  I went for a run to catch my breath before I did anything hasty.  Upon my return almost the entire move had come back, much like the move out there this morning.

It’s not a good way to live.  Chalk this up on the list with Dark Pools and Flash Trading, under questionable practices on electronic markets.