[Frupal]

Any finance whizzes out there? So I was watching my tech stocks rise a bit this morning, and then all of a sudden they FLEW down, as if millions of trades were happening simultaneously. I’m blaming the bots, thinking that they are programmed to wait until the stock rises enough so that when they dump their 2 million shares they make a few million bucks. Then when the stock falls, the bots buy back. If this is the case - even a little - should these bot trades not be regulated or outlawed entirely? Be pretty easy to do with captchas. What do you think?

[2000cs]

Program buying and selling is definitely a part of the markets these days, but there is a lot going on.
Some factors:
1. Big tech run-up may have gotten ahead of itself, so a bit of a reset
2. Some institutions don’t like to hold over the holiday weekends, and sell into them
3. Election may be playing a role as we get closer to Election Day
4. Good jobs data may undermine push for stimulus package; stimulus is generally good for the markets
5. Is there a vaccine or isnt there? Both stories are in the news. Vaccine is good for the market but not for the work-from-home tech sector
6. Company specific concerns (FB dropping political ads a week before election, Apple delaying iPhone, etc)
7. God knows what else, but the pundits will explain it all (LOL).

I’m not really a market expert but that is my sense of things.

[2000cs]

After I typed that response I received this in an email from a major bank expert:

“ The market reaction to the report has been decidedly mixed, with US rates currently up 1-7bps as the curve steepens, but with equities down big (-1.8%) for the second consecutive day. Although labor data is improving, the road ahead remains unclear. Even with the CDC informing States to be ready for a November 1 vaccine distribution, the market appears to heavily discount that guidance. On the Congressional front, cooperation on additional fiscal stimulus is reportedly improving although there are no signs of meaningful progress. To complicate matters, Congress will also need to approve a stop-gap spending bill by the end of the month to avoid a government shutdown. Looking further ahead, the September jobs data will be the final full jobs report before the November Presidential election, giving the market limited information before the election date has passed.”

I usually get a daily market update from another good source later in the day and will post from that if there is anything noteworthy.

[smyles]

Imagine matrix, but limited to stock market. Big boys manipulate it using high freq. trading, having pretty much unlimited $$$ at their disposal, coupled with access to info like all your stops and triggers. Free market, news, analysts, experts - it's all fluff, window dressing.

[XutvJet]

You don't have anything to worry about assuming you're in it for the long haul. The market has never made much sense and that is especially the case now. It has made no real sense why the market kept climbing and climbing amid the pandemic. I firmly believe there are major players that manipulate the market and the way the market has behaved since June is evidence of that. Thing is, for most of us $5M and less portfolio folks, we have little control.

[Frupal]

Originally Posted by XutvJet

You don't have anything to worry about assuming you're in it for the long haul. The market has never made much sense and that is especially the case now. It has made no real sense why the market kept climbing and climbing amid the pandemic. I firmly believe there are major players that manipulate the market and the way the market has behaved since June is evidence of that. Thing is, for most of us $5M and less portfolio folks, we have little control.

I went through March without selling, and I’ll get through September too. The thing is, I was up about 25% higher than before the March debacle, when the September blues hit. So I’m gonna hang tough. I don’t really need the funds for a few years , but I really hate seeing it go down.

[upstatedoc]

lets not panic, fiddle on

[Frupal]

Originally Posted by upstatedoc

lets not panic, fiddle on

Haha! I am the mad fiddler.

[2000cs]

Today was a buying day, if you had funds, stocks you want to own, and balls.

[matty088]

No one knows what the market is going to do in the short term.

[bimmerfrk]

To much volatility. Rule is if you can't trade the vix you cant trade the market.

Stop getting burnt and let the late COVID election cycle play out.......

[Noneya]

I work in high frequency trading and write said "bots". This is a very tightly regulated market and market manipulation (which is what you described) is a felony crime with very large penalties. Not only is the government watching over the players and constantly trying to catch them doing smth wrong (with exponentially increasing penalties and decreasing thresholds of what constitutes a wrong), but the players themselves are very vigilant of anyone else pulling a trick on them and everyone is incentivized to report the violators. So no, it's not the "bots", it's people.

And to the last poster - if you think about it a little - predicting the future is harder the farther into the future you aim to predict. So in fact many more people can predict what will happen in the short term than the long term.

Finally, the advice of putting money in an index fund and not looking at it cannot be overstated. Anything else you do is pure gambling and thinking otherwise is a delusion.

[matty088]

Originally Posted by Noneya

I work in high frequency trading and write said "bots". This is a very tightly regulated market and market manipulation (which is what you described) is a felony crime with very large penalties. Not only is the government watching over the players and constantly trying to catch them doing smth wrong (with exponentially increasing penalties and decreasing thresholds of what constitutes a wrong), but the players themselves are very vigilant of anyone else pulling a trick on them and everyone is incentivized to report the violators. So no, it's not the "bots", it's people.

And to the last poster - if you think about it a little - predicting the future is harder the farther into the future you aim to predict. So in fact many more people can predict what will happen in the short term than the long term.

Finally, the advice of putting money in an index fund and not looking at it cannot be overstated. Anything else you do is pure gambling and thinking otherwise is a delusion.

High frequency Could be about manipulation. Many strategies are predatory in nature. Either beating bigger orders to the market due to faster speed or sniffing out large benchmark strategies and picking them off. Some strategies are just there for the rebate of being a liquidity provider or bidder.

That industry day is coming. In time there will be much tighter regulations than you are dealing with now.

And I completely disagree. The short term is pure gambling. No one knows what stocks are doing in the short term. A guy that never Traded in his life has the same skill as someone that has traded for twenty years. Skill and science comes into play when one has a long term Time horizon and a proper asset allocation Strategy.

There is literally no facts that you can point to that shows a particular strategy works in the short term. high frequency seems to have an edge but as I said above there are reasons for that and those reasons are very grey from a compliance perspective.

In one breathe you are saying the short term is easier then in the next you are saying it makes the best sense to be In passive index funds and forget about. Aka the long term

[Noneya]

Originally Posted by matty088

High frequency is all about manipulation. Many strategies are predatory in nature. Either beating bigger orders to the market due to faster speed or sniffing out large benchmark strategies and picking them off. Some strategies are just there for the rebate of being a liquidity provider or bidder.

That industry day is coming. In time there will be much tighter regulations than you are dealing with now.

That's incorrect. The vast majority of high frequency trading is about shifting liquidity in time or venue or symbol or product category. And that's a service people are very willing to pay for. It will not disappear until the day the demand for that goes away for some reason.

[Noneya]

Originally Posted by matty088

And I completely disagree. The short term is pure gambling. No one knows what stocks are doing in the short term. A guy that never Traded in his life has the same skill as someone that has traded for twenty years. Skill and science comes into play when one has a long term Time horizon and a proper asset allocation Strategy.

There is literally no facts that you can point to that shows a particular strategy works in the short term. high frequency seems to have an edge but as I said above there are reasons for that and those reasons are very grey from a compliance perspective.

Do you think it's easier to predict the weather tomorrow or in 3 days? Once you work through the reasons why, apply that to markets.

[matty088]

Originally Posted by Noneya

That's incorrect. The vast majority of high frequency trading is about shifting liquidity in time or venue or symbol or product category. And that's a service people are very willing to pay for. It will not disappear until the day the demand for that goes away for some reason.

Nothing I said is incorrect. Your strategy is in its infancy compared to other types of investing like value or activism. Most of the policy makers Hardily even understand it at this point. Beating bigger orders to the market, sniffing out large orders based on flows, posting liquidity for a rebate than quickly disappearing, and many other types of predatory strategies will have their day under the microscope in A real way just like long/short fast money did.

[matty088]

Originally Posted by Noneya

Do you think it's easier to predict the weather tomorrow or in 3 days? Once you work through the reasons why, apply that to markets.

No. You are wrong. Bc the short term has far more variables. Like the streets positioning into events. Sentiment and so on. Getting the numbers right in the short term is meaningless bc of these other much harder to understand and calculate Variables. However if a company has solid fundamentals and management executes on their strategy the stock should outperform in the long term.

You are contradicting yourself already saying index funds are a good idea then say the short term is easier. You realize what you said is contradiction.

[Noneya]

Originally Posted by matty088

Nothing I said is incorrect. Your strategy is in its infancy compared to other types of investing like value or activism. Most of the policy makers Hardily even understand it at this point. Beating bigger orders to the market, sniffing out large orders based on flows, posting liquidity for a rebate than quickly disappearing, and many other types of predatory strategies will have their day under the microscope in A real way just like long/short fast money did.

Your views are misinformed. I doubt I can change your mind, but feel free to ask any questions, I'm happy to answer.

[matty088]

Originally Posted by Noneya

Your views are misinformed. I doubt I can change your mind, but feel free to ask any questions, I'm happy to answer.

They aren’t misinformed. They are in fact very informed. But it doesn’t matter. But I don’t think it’s a good idea to make a comparison of predicting the weather to the stock market.

[Noneya]

Originally Posted by matty088

No. You are wrong. Bc the short term has far more variables. Like the streets positioning into events. Sentiment and so on. Getting the numbers right in the short term is meaningless bc of these other much harder to understand and calculate Variables. However if a company has solid fundamentals and management executes on their strategy the stock should outperform in the long term.

You are contradicting yourself already saying index funds are a good idea then say the short term is easier. You realize what you said is contradiction.

I don't think you understood. Short term is far more predictable, because of simple math. That doesn't mean it's more predictable for you - it's more predictable for professionals. My advice on investing in an index fund is precisely due to the above - unless you're a professional with a lot of resources the best you can do is the market. Anything else is gambling around it. If you enjoy that - go for it.

[matty088]

Originally Posted by Noneya

I don't think you understood. Short term is far more predictable, because of simple math. That doesn't mean it's more predictable for you - it's more predictable for professionals. My advice on investing in an index fund is precisely due to the above - unless you're a professional with a lot of resources the best you can do is the market. Anything else is gambling around it. If you enjoy that - go for it.

What makes you think I am not a professional? That was arrogant assumption.

Show me professionals that are beating the market. You realize the hedge fund community has woefully underperformed the market pretty much forever. And vanilla mutual funds struggle to beat the market. Most can not. Hence the rise and now fame of passive strategies. The very best and most acclaimed are failing.

I am sorry you are just wrong. There really is no way other way to put it.

[Noneya]

Originally Posted by matty088

They aren’t misinformed. They are in fact very informed. But it doesn’t matter. But I don’t think it’s a good idea to make a comparison of predicting the weather to the stock market.

Tomorrow the temperature wherever you are is likely to be very similar to temperature today. In 3 days - much less likely.

Tomorrow TSLAs price will be very similar to its price today. In 3 days - not so much.

There's some very simplistic predictions for you that you can verify to be true by running them over historical data.