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Strategies & Market Trends : Technology Stocks & Market Talk With Don Wolanchuk -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (16560)	6/18/2004 7:43:10 PM
From: bearshark	Respond to of 207950

>>>In a sense your saying the new arena is not human. Markets are being changed by technology and are responding differently to the human emotions of greed and fear...<<< Programs are set by humans. I think greed and fear are still there. Its just a different mix of players. Back in the middle 1980s, you could watch the tape and see a program start and then be joined by other programs. I sat and watched the tape to see how I could trade these events. Within 90 seconds, the tick could go from a plus 600 to a minus 600 or so. It may have been more drastic than that. At the peak of the old programs, the INDU moved at times about 200 points or more in less than an hour. Let's just say it was a 10 percent move--5 up and 5 back--in less than an hour. That was with the INDU at 1700 or so. (Today, those moves would be 500 points up and 500 points back in an hour.) In late 1986, I was having dinner with a friend in Alexandria, Va. I remember telling him we would see a 1-day, 500 point move in the INDU within a year. I think is was a logical expectation based on what I was watching. Of course, we had the 22 percent decline and the 500 point move--caused by program trades. Today's markets and programs are different. We have more "safeguards" in place and I think the programs are more sophisticated. However, we are now in a market where programs account for the majority of trading. I think it is a worthwhile pursuit to understand how they are acting.