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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: prometheus1976 who wrote (108255)	5/9/2010 1:29:34 AM
From: rr_burns	Read Replies (1) \| Respond to of 110194

I think he was trying to point you at this: playstocks.net which has an interesting (if slightly overly excited) examination / summary of the plunge on Thursday: Of note: 1) Gold and the ETF GLD did not behave "properly" in the plunge time window. from the link: Gold was heading higher all day and just before the computers went berserk after 2:30, gold had been trading between $1194 and $1198 from about noon hour and at 2:00 it hit $1200. Once the computer sell programs went 'a wall' gold was sold down to $1190, stopped there and in the next half hour quickly went back up to about $1207, by 3PM it was 1208 and hit $1210 shortly after 3PM and then drifted downward with the market in the next hour to about $1205. Surely the automated trading should have spiked gold upwards - at the same time? ( i cannot find a minute to minute GLD chart to compare with or to check the author's statements) 2)Closely related markets (i.e. the TSX - toronto) unprotected by the "plunge protection" intervention mechanisms in the US had a valley "floor" for an additional 15 minutes (at least) of trading. 3)There is something "not right / asymmetric" about the trades that were reversed in the plunge time window ( i.e. not all were reversed) 4)It has the look of the (pen?)ultimate "stop-loss whipsaw" in retail investor terms. A couple of overall observations: - If it was plunge protection that occurred ( to reverse the swan dive) it is a serious mistake to think of it as an "un-stirring of the coffee" which is how a lot of the media play it to us. The reality is that the US$ took off ( unlike gold), oil fell ( well it's priced in $US so that should happen if the U$buck is headed north). I'm thinking that the rocketing of the US buck was the achieved objective - it prevented ( well put a cliff to scale in front of) strategic currency trading that might otherwise rescue Greek and Euro interests. It also has forced a (likely) mounting group of US$ shorts to cover. - An interesting exercise is to ask "que bono" - "who benefits" at the political, economic, and finance industry level for this "event".

To: prometheus1976 who wrote (108255)	5/13/2010 11:50:57 AM
From: Ron Struthers	4 Recommendations Read Replies (2) \| Respond to of 110194

Good point about 'malfunction' yes the computer programs probably did what they were designed to do, just that their users probably did not want or expect that outcome. I think the bigger problem is the computer program trades are creating a false market. Recent research shows the computer trading, especially the flash and high frequency make up 73% and probably higher now of all the volume on US exchanges, but this 73% is represented by only 2% of the participants. So basically 2% of market participants are setting the tone and direction in the market. I do not like the smell of this. The flash trading is for sure front running in my books. Why should 2% of the participants get first crack at a trade? Just because they pay a fee? Why would they pay a fee? Because it is profitable to front run the market