I think the thread has run its course actually... last post from me at least.
The reason the boards have such a sway is in their utilisation by the algorithms to attain a goal.
Moving from 15000 to 16000 or 6000 to 7000 would be a straight rise only moderated by the news and we all get that at roughly the same time these days.
So the playing field would be so level that everyone would be a winner and no-one would actually make a penny, we'd have simply inflation, the continuous rising of prices.
A barely literate moron could run any Bank (stop being sniggering at the back!
) in those circumstances.
World events actually barely move the markets, we are fed a diet of "He said this, she said that" or "They did this or they did that" and people in the 'vox vulgaris' comment pages on the Big6 trading sites struggle daily to find 'reason' for the startling dichotomy in performance in say the Nasdaq and the same days trading on the DJI, if you don't read them and nearly spit your coffee/tea across the keyboard and screen when they trot out some half-ahsed reason for it.
The 'classic' this week has been the 'reason' found for the stupifyingly faked up drop since the Bernanke 'no tapering' statement... the y came up with some mentalistic clap-trap about one of the panel saying it was close, WTF else would it be???
There has not been complete agreement for the last 6 months, but the underlying market needed funds (ever hungry) and so the money put in to take the market up was culled, cold-blooded removal of new money and a damned lot of older money too!
But instead of the stark truth being made plain, the copy writers trot out the laughable and present it in all seriousness, and people lap it up and, it seems, believe every word.
The erratic nature is at least 75% as a result of the small and medium trader, the rest is the old moderators and the real money remains entirely masked in a plethora of ultra-fast ultra-small deals that turn direction faster than you can blink.
They move like that to feed, their food is your money and doubling back to take a bite is nothing to them.
Your cards are laid face up and they 'snack' where the pickings are best.
The result is an erratic and almost entirely masked market, entirely masked that is if you fall for the deception, if you don't at least you stand a 1 or 2% better chance of holding onto your hard-earned.
So I will tell you yet again and for the last time, the degree of influence of our collective action on what you call bucketshops is vastly out of proportion to what is generally thought.
You can disagree all you like, it is your choice... been there... know different.
The funds don't give a damn which way the market goes day to day, they are so fast and accurate that changing direction is almost cost free now as the change is made in time delayed franchised markets, it's virtually costless now and often a profit making exercise as the Algos integrate with markets adopting the 'Algo Way' of trading growth.
But without way points and term points there is just total chaos, if you want to 'big yourselves up' it is that all those little bets stops the inevitable descent into chaos and entropy.
Are you getting this picture yet matey?
World events are sudden and often huge movers of figures but not even vaguely frequent enough to keep the Algos from eating themselves and destroying the market itself.
More are coming and faster and potentially more dangerous... with every incremental reduction of latency and expansion of operating base the risk to you and I go up.
Hedge funds are the most acquiescent of all the bodies using Algos, they move hither and thither in a swarm of magnificent size and will go anywhere they have no effect on prices, that is anti-thetical to breaking the fund into $2500 little fishes (Piranhas?
) and sending them off to make money.
No hedge fund, no matter how big it is, if it is in the hands of Algos, will ever change or dictate a single price, they'd be netted if you could catch them that way!
You and I do that and a majority will fall in the line of duty giving this direction... the many on here point in the right direction, the 'correct' direction and are promptly shot in the back and robbed as the swarm buggers off in exactly the opposite direction, taking with them the smallest number that pointed the 'wrong' way, any of whom will be shot in back at the next way point if they 'get it right'.
So the boards do have influence far beyond the blinkered horizon you set yourself.
Now in the 'industry' this is known, understood and (occasionally) appreciated and the symbiosis is the result, the boards have the option in the armoury but don't want to use it for good reasons.
I used an analogy about the term point being a nearby Church and the way points being various place along the way, the church is the destination and all along every route to it there are voices offering food and drink and the Algos job is to take in as many of these way points it can.
The term point is not in our domain of influence (mentioned in my 1st or 2nd post I think) that is for the Central banks to determine roughly and then the Algos modified to do exactly that.
Another feature of Algos is the ability to now communicate changes or modifications in objective.
All Algos in that building in NJ are formed from a single root calculation and formula, but each is then individualised and this diversity is the cause of them being both capable of not attacking each other if busy but attacking each other if they are not.
By attacking each other I mean that one influences the other to change tack and instead of going off together in the new direction the repeatedly force the other to change direction.
If you want to see this, go on to your board set the candles to about 10 seconds and look for the candle with a tiny bar and short wicks each side usually this is the best place to take a position... always go against your first instincts though.
Remember the larger collective body is the one that is culled! (it costs more to fund the resultant gains!)
I've said enough on this really.
Enjoy the rest of the weekend!
