Time For A Short -Term Market Dump?
As I wrote on here some time ago, I am beginning to wonder how much of market action is actually long-term investors allocating capital versus Wall Street firms, short-term focused hedge funds and day traders batting stocks back and forth. I am highly dubious of any claims to substantial new long-term cash commitments to stocks regardless of any flow analysis. In other words, I firmly believe this is a trader's market driven by liquidity fueling Frankenstein finance.
So let's do a very simple test. Not a very scientific test. Not one where we can clearly draw any conclusions. But one that might give us some anecdotal indication of how much of recent market action is just batting stocks back and forth amongst traders.
We just hit a twenty hour low in the major indices this afternoon. That will likely trigger some recursive selling by program trading over coming days or longer. If we roll over substantially from here, we might gather some anecdotal evidence that this entire move over the past ten days or so was simply batting stocks back and forth and market manipulation by short-term traders.
I doubt this will work as I would intend it but let's watch and see.
11 AM Thursday Update. Well, that didn't work. Many short term trading algorithms key off of 20 hour moves. I think someone out there realizes that. Is it a coincidence futures traders ran the market exactly when we hit a 20 hour low? As the morning progesses, it appears as though we may still be headed for a dump in coming days.
So let's do a very simple test. Not a very scientific test. Not one where we can clearly draw any conclusions. But one that might give us some anecdotal indication of how much of recent market action is just batting stocks back and forth amongst traders.
We just hit a twenty hour low in the major indices this afternoon. That will likely trigger some recursive selling by program trading over coming days or longer. If we roll over substantially from here, we might gather some anecdotal evidence that this entire move over the past ten days or so was simply batting stocks back and forth and market manipulation by short-term traders.
I doubt this will work as I would intend it but let's watch and see.
11 AM Thursday Update. Well, that didn't work. Many short term trading algorithms key off of 20 hour moves. I think someone out there realizes that. Is it a coincidence futures traders ran the market exactly when we hit a 20 hour low? As the morning progesses, it appears as though we may still be headed for a dump in coming days.
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