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It's a slow day and not much should happen in the pre-earnings-season lull - unless the last 30...

It's a slow day and not much should happen in the pre-earnings-season lull - unless the last 30 minutes see another swing that may be caused by the recent increase in late ETF trading.
Comments (6)
  • Nathan W Martin
    , contributor
    Comments (87) | Send Message
     
    I think the reason for an increase in ETF trading has to do with the "in crises all correlations go to 1" phenomena. For a few weeks all sectors and all stocks were hit nearly equally hard so ETFs were the preferred way of playing the trends which only decreased the ability of individual stocks to act on their own behalf.

     

    This occurrence warrants further study because it has further erroded the confidence that the market is functioning in a "fair" manner.
    9 Jul 2010, 01:52 PM Reply Like
  • MarketGuy
    , contributor
    Comments (3983) | Send Message
     
    not ETF, but HFT.
    9 Jul 2010, 01:58 PM Reply Like
  • Tack
    , contributor
    Comments (14581) | Send Message
     
    MG:

     

    Short traders, robotic and otherwise, are attracted to ETF's for a couple reasons:

     

    1) They are thinly traded, so once a short position has been established, it's rather easy to cause a spike in volatility and exaggerated drop in price with just a little well-placed volume.

     

    2) Many ETF's are inhabited on the long side by investors, more than traders, and often, when an investor gets scared out of a position, they stay out, or at least hesitate in rebuying. This makes it easier for shorts to cover without competitive buying from other investors, re-entering their discarded positions, driving up prices.
    9 Jul 2010, 02:09 PM Reply Like
  • dinamo7
    , contributor
    Comments (186) | Send Message
     
    lol computers doing 95% of the vol.
    if the market spikes at the EOD expect to see headlines about investors picking up bargins
    9 Jul 2010, 02:00 PM Reply Like
  • Spectrulater
    , contributor
    Comments (142) | Send Message
     
    Bots like ETFs. I don't think the volume of late trading can simply be attributed to day traders. Moves are too one-sided.

     

    Shine a light on those dark pools, and we'll learn a lot more about the shenanigans. Where are you, SEC?
    9 Jul 2010, 02:00 PM Reply Like
  • cash
    , contributor
    Comments (520) | Send Message
     
    SEC will get involved only if the market drops. Not if it moves up. All is fair game so long as the markets move up. The govt needs the cap gains
    9 Jul 2010, 02:08 PM Reply Like
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