It Looks Like Computer Program Buying Kicked In
It looks like index related computer program buying kicked in early today, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. Liz Ann Sonders of Charles Schwab recently estimated that 30% to 40% of all trades on the NYSE are computer program related trades, and, those trades probably account for 70%+ of the volume or at least 70%+ of the dollar volume (actual money involved in the overall trading on the NYSE) on the NYSE.
The Fed injected a massive $24 Billion into the system last Thursday and a humongous $38 Billion into the system last Friday, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE, to ward off a market crash and to provide confidence that one wouldn't occur.
The big money on Wall Street understands how important program trading is, and, the high correlation between recent Fed credit and the degree of program buying. So, the big money on Wall Street understood late last week that very strong program buying would occur in the near future based on the humongous injection of Fed credit into the system, thus providing confidence that a market crash wouldn't occur.
The Fed, understanding well how much program buying was likely to occur in the near future based on their massive credit injection, only provided $2 Billion in credit on Monday and a rare no credit/zero yesterday. It appears that they'll add some credit today, but, it hasn't been listed yet.
It was kind of a game of chicken between the Fed and the program traders early this week, since the program traders didn't begin buying in a big way until today, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, and, the Fed held off on providing any credit in yesterday's big selloff. They realize that too much credit and a huge market spike can quickly occur (computers are doing the trading, which involves big money), that would create too much volatility, and, possibly shake market confidence instead of instilling it.
....... http://www.JoeFRocks.com/ .
The Fed injected a massive $24 Billion into the system last Thursday and a humongous $38 Billion into the system last Friday, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE, to ward off a market crash and to provide confidence that one wouldn't occur.
The big money on Wall Street understands how important program trading is, and, the high correlation between recent Fed credit and the degree of program buying. So, the big money on Wall Street understood late last week that very strong program buying would occur in the near future based on the humongous injection of Fed credit into the system, thus providing confidence that a market crash wouldn't occur.
The Fed, understanding well how much program buying was likely to occur in the near future based on their massive credit injection, only provided $2 Billion in credit on Monday and a rare no credit/zero yesterday. It appears that they'll add some credit today, but, it hasn't been listed yet.
It was kind of a game of chicken between the Fed and the program traders early this week, since the program traders didn't begin buying in a big way until today, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, and, the Fed held off on providing any credit in yesterday's big selloff. They realize that too much credit and a huge market spike can quickly occur (computers are doing the trading, which involves big money), that would create too much volatility, and, possibly shake market confidence instead of instilling it.
....... http://www.JoeFRocks.com/ .
posted by Joe Ferrazzano at
7:30 AM
