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Strategies & Market Trends : John Pitera's Market Laboratory
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To: Raymond Duray who wrote (5778)3/3/2002 12:19:46 PM
From: Dan Duchardt  Read Replies (2) of 33421
 
Ray,

One of the things that I'm discouraged by in any attempt to do TA is the corrupting effect of interventions of the part of the Working Committee on Financial Markets in the index futures market. It seems to me that the small trader is at a distinct disadvantage and prone to being on the wrong side of the market if he's short, when the FRB in collusion with Goldman and Merrill apply massive amounts of public money to goose the futures and prop up the stock market.

Does anyone have, or think they have a way to estimate the extent of the intervention you suggest? How much is the "massive amounts of public money" that have been used to stimulate the futures to prop up the market? As a futures trader, I confess to being frequently confounded by the apparent ease with which long slow downtrends are completely reversed in a small fraction of the time and with a small fraction of the volume. It certainly does appear that whoever is buying is waiting to jump all over a thin offer side to blow through the most price levels with the fewest number of contracts. That certainly suggests the bounces are being fueled by big money rather than a coincidental surge of small player buying, but it does not tell me where the big money is coming from. Could it be the big houses are pumping the futures merely for the sake of their interests in the broader market because they know everyone is watching the futures for market direction? Considering the volume of contracts traded, it does seem to be a small tail wagging an awfully big dog.

Dan
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