Tuesday, March 9, 2010

A follow up to "too bullish"

We've had a lot of discussion in Quick Takes Pro about the low volume rally and even it if is indeed low volume. We found this on the blogosphere so read it with a grain of salt. There is an element of conspiracy in there.
Furthermore, if anyone was merely looking at the trading action in regular hours, one would think there was absolutely no profit made since early September. The reason for that: all the upside since September 14th has come exclusively from afterhours action.

Every single day, minimal volume pushes the futures index higher. Good news, bad news, it don’t matter to the Goldman S&P and Russell 1000 futures desk: they just lift every micro offer, giving the impression that the market is unstoppable, often leapfrogging each other as the latest viagra’ed GDP or unemployment rumor is spread.

Come morning, it is time for the HFT (high frequency trading) brigade to come in and scalp their
trillions of pennies while leaving the market unchanged, then at 4pm handing it off again to leveraged futures manipulation and dark pools. In a nutshell, this is the secret of the past quarter’s phenomenal market performance.

- Peter Cooper, financial journalist

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