Sunday, April 12, 2009

Futures Games

This is a pretty amazing post on where the orders are originating that are driving the equities markets. A full third of all trading volume is now generated by futures-related programs. These trades are simply the big boys hitting the buy and sell buttons to drive price.

Futures trades are short-term in nature and designed to accelerate moves, maximizing profits and minimizing the amount of time a position needs to be held.

What is even more staggering is that for every share Goldman Sachs trades for its clients, it trades 5 shares for its own account! That is not healthy for the markets.

http://zerohedge.blogspot.com/2009/04/incredibly-shrinking-market-liquidity.html

My fear all along has been that the public is giving up on the markets because they are so blatantly manipulated and rigged for the big players.

Here is another great post showing how the majority of the rally off of the Mach lows has been during the afterhours, when little volume is required to move prices higher. This is creating an air pocket below price and will most likely not end well. Every other rally in the Bear has had similar characteristics.

http://zerohedge.blogspot.com/2009/04/putting-low-volume-rally-into-context.html

The economy is now becoming nothing more than a Third World, speculative trading casino.

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