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Strategies & Market Trends : Free Float Trading/ Portfolio Development/ Index Stategies
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From: dvdw©2/11/2007 4:14:41 PM
of 3821
 
I came across an apt description of reversion to the mean recently on Daily Speculations. There has been at least two references to describing periods in history when the market was referred to as a Bucket Shop.

IMO we have again reverted to a period when this is; or could be the case.

A Bucket Shop was a place where orders were taken by a brokerage entity in the knowledge that the customer would certainly loose their money, so those orders would never actually reach any exchange. If the Bucket Shop was caught or somehow; if customers started making money the shop would close and spring up somewhere else.

This description of a scheme from history can only happen in the absence of Supply and Demand. Hence we know that in this period Supply and demand is disconnected and therefore its reasonable to attribute the failures to locate shares as reversion to the bucket shop mean.

This is obvious in the trade threads where shorts have no fear of accountability because the word on the street apparently is that the volume does not matter when you've got a suitable replacement story like Overbought or OverSold.

What a crock......

System Reform is in order, because without it, these bucket shop brokerages will be busted big time. With each passing week the awareness of systemic sore thumbs, grows proportionately.

Investors began to notice quarterly reports; when record profits were being rolled up on extremely low trading volumes,
providing everyone with better eyes, a peek behind a bucket shops kimono.

Febr postings at dailyspeculations.com
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