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MARKETS WHIPLASHED BY HFTS

|Includes: BWX, DBA, DBB, DJP-OLD, EEM, EFA, EPI, EWI, EWJ, EWP, EWQ, EWZ, FXE, FXI, GDX, GLD, IEF, IEV, iShares Russell 2000 ETF (IWM), IYR, IYT, JJC, JJG, LQD, QQQ, RSX, SLV, UGA, USL, UUP, XLB, XLE, XLF, XLI, XLV, XLY

 
 

The ubiquitous 2:15 PM Buy Program Express was launched on time by HFTs. This started a rally like the wave a crowd would start at a football stadium. It ebbed for a time. But, in the last 20 minutes of trading an HFT short-squeeze from hell occurred. The change in conditions was so abrupt headline writers couldn't keep up.

The stimulant was news that Italy is rumored to be on bended knee to China asking for money. China would have to average down to protect whatever investments it already has in the euro zone. The algos must have this kind of stuff programmed in their HAL 9000s. Greece is all but certain to default and China may not care if they do other than the resulting contagion. Then there's the possible downgrade by Moody's of French banks but that didn't bother the algos late in the day.
 

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