[ExI] Signs of the singularity

[BillK]

On 5/28/10, BillK wrote:
> More like Signs of Wall Street terminal insanity.
>
>

To further explain my comment, Nathan A. Martin (economist) just wrote
this morning:
<http://economicedge.blogspot.com/2010/05/morning-update-market-thread-528.html>

Good Morning,

Equity futures are flat following yesterdays 284 point jaunt. That was
a ridiculous 97% up day by volume on the NYSE. Now, normally I would
consider that a “panic” buying day, but it came on much lower volume.
Remember, volume confirms price, and volume hasn’t confirmed any
direction but down for the past 3 years.

And last night it dawned on me what’s occurring is not the same thing
as what used to occur in the good old days of 90ish percent up or down
days… Of course you know that the market is extremely volatile, but
we’ve had SIX 90%+ down days in the past few weeks to go along with
another couple 90%+ up days (no follow-through on the upside, only on
the downside). These have not just been 90%, they’ve been in the high
90’s. Now combine that fact with the fact that four banks had perfect
trading quarters… the conclusion is that HFT (High Frequency Trading)
has become so good and so fast at chasing short term momentum that all
the machines get on the same side of the trade way faster and more
efficiently than they used to. I mean, come on – 97% off all the
trading volume was long yesterday, that’s simply absurd. Was mom and
pop going long because we finally broke back above 1,090? Hardly,
these lopsided days are yet another sign of how HFT and a very few
players have taken over the markets. I reiterate; the markets no
longer exist, they are a computer simulation.
--------------------

BillK