- Sep 19, 2011
- 28,396
- 9,972
- 900
Listening to a talking head today lament that this was the worst October for DJI in volatility in 118 years made me wonder if these and other pundits have considered what is really happening in the stock market generally speaking.
I had an inkling it was..." computer programs execute buy and sell orders based on complex algorithms and formulas, without a human involved in the process.
On a typical trading day, computers account for 50% to 60% of market trades, according to Art Hogan, chief market strategist for B. Riley FBR. When the markets are extremely volatile, they can make up 90% of trades.
"A machine is making a decision based on the fact that we reached a level to buy or sell," Hogan said. "The problem with that is everyone's algorithms are pretty much the same, they key on the same trigger points. That's causes really fast momentum swings."
Machines are driving Wall Street's wild ride, not humans
With that premise that machines are running the stock market and the stock market being an indicator of economic well-being, is there any concerns regarding this October 2018 wild fluctuations if it is based on machines utilizing algorithms and formulas?
Well there is ONE human influencing factor that none of us even machines have control over.
The Federal Reserve.
The Federal Reserve System fulfills its public mission as an independent entity within government. It is not "owned" by anyone and is not a private, profit-making institution.
As the nation's central bank, the Federal Reserve derives its authority from the Congress of the United States.
It is considered an independent central bank because
its monetary policy decisions
do not have to be approved by the President or anyone else in the executive
or legislative branches of government,
it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.
Federal Reserve System - Frequently Asked Questions (FAQs) - Federal Reserve Bank of Richmond
Kind of scary isn't it? Especially when we read what the current Federal Reserve Chairman
deigns to be most important:
Powell says Trump's trade policy has become a growing concern among Federal Reserve members
Powell says Trump's trade policy has become a growing concern among Federal Reserve members
Trump's trade policy is solving the major problem the US has had in the past.
The inequity of the trade agreements.
And yet these "experts" are concerned.
Where were they when it was the "trade policy" that :
A Jeep Wrangler can cost $30,000 more in China than in the United States — and the reasons illustrate a growing point of tension between the two countries.
Manufactured in Toledo, Ohio, the Wrangler is a descendant of the jeeps that were used by American forces in World War II. Equipped with a 3.6-liter engine and a five-speed automatic transmission, the Rubicon edition of the Wrangler has a suggested retail price of $40,530 in the United States.
But in China, the same vehicle would set a buyer back by a hefty $71,000, mostly because of taxes that Beijing charges on every car, minivan and sport utility vehicle that is made in another country and brought to China’s shores.
China’s Taxes on Imported Cars Feed Trade Tensions With U.S.
So with the stock market responding to computer trading the only area that the political elite now
has an say so is the MSM's constant barrage against anything Trump..(including "trade policy")
the ONLY tool I have to help in this "trade policy" concerns is my singular opinion.
Which is let Trump do his deals! He is approaching "trade policy" on a one-on-one basis.
So far it has been agreed upon by Mexico/Canada and other countries that recognize that the
US is no longer the patsy in trade deals.
I had an inkling it was..." computer programs execute buy and sell orders based on complex algorithms and formulas, without a human involved in the process.
On a typical trading day, computers account for 50% to 60% of market trades, according to Art Hogan, chief market strategist for B. Riley FBR. When the markets are extremely volatile, they can make up 90% of trades.
"A machine is making a decision based on the fact that we reached a level to buy or sell," Hogan said. "The problem with that is everyone's algorithms are pretty much the same, they key on the same trigger points. That's causes really fast momentum swings."
Machines are driving Wall Street's wild ride, not humans
With that premise that machines are running the stock market and the stock market being an indicator of economic well-being, is there any concerns regarding this October 2018 wild fluctuations if it is based on machines utilizing algorithms and formulas?
Well there is ONE human influencing factor that none of us even machines have control over.
The Federal Reserve.
The Federal Reserve System fulfills its public mission as an independent entity within government. It is not "owned" by anyone and is not a private, profit-making institution.
As the nation's central bank, the Federal Reserve derives its authority from the Congress of the United States.
It is considered an independent central bank because
its monetary policy decisions
do not have to be approved by the President or anyone else in the executive
or legislative branches of government,
it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.
Federal Reserve System - Frequently Asked Questions (FAQs) - Federal Reserve Bank of Richmond
Kind of scary isn't it? Especially when we read what the current Federal Reserve Chairman
deigns to be most important:
Powell says Trump's trade policy has become a growing concern among Federal Reserve members
- "A number of participants in the [Federal Open Market Committee] did bring up the issue of tariffs," Federal Reserve Chairman Jerome Powell said at a news conference.
Powell says Trump's trade policy has become a growing concern among Federal Reserve members
Trump's trade policy is solving the major problem the US has had in the past.
The inequity of the trade agreements.
And yet these "experts" are concerned.
Where were they when it was the "trade policy" that :
A Jeep Wrangler can cost $30,000 more in China than in the United States — and the reasons illustrate a growing point of tension between the two countries.
Manufactured in Toledo, Ohio, the Wrangler is a descendant of the jeeps that were used by American forces in World War II. Equipped with a 3.6-liter engine and a five-speed automatic transmission, the Rubicon edition of the Wrangler has a suggested retail price of $40,530 in the United States.
But in China, the same vehicle would set a buyer back by a hefty $71,000, mostly because of taxes that Beijing charges on every car, minivan and sport utility vehicle that is made in another country and brought to China’s shores.
China’s Taxes on Imported Cars Feed Trade Tensions With U.S.
So with the stock market responding to computer trading the only area that the political elite now
has an say so is the MSM's constant barrage against anything Trump..(including "trade policy")
the ONLY tool I have to help in this "trade policy" concerns is my singular opinion.
Which is let Trump do his deals! He is approaching "trade policy" on a one-on-one basis.
So far it has been agreed upon by Mexico/Canada and other countries that recognize that the
US is no longer the patsy in trade deals.
