Tony Chou @ Investorz' Blog said:

I wrote a post on my blog about all the recent market volatility. I credit it to computer trading, because all these programs tend to generate the same buy and sell orders, hence, allows the market volatility to soar through the roof.

Sounds like I am on the same wavelength as you!  Technology is sometimes intimidating!

Yes. That is why when I see some crazy volatility, I head for the sidelines. It's best not to risk getting caught in the herd that's moving from one side to another.

That sounds crazy! I have never heard of this, but I guess that's one more thing to keep an eye out for....

the guy that I knew wasn't a whale or institution, so the impact wasn't huge (I think), but if there are some dollars, and they let it ride, it could really impact future gains.  Oh, I'm thinking it will still go up, but instead of 9% maybe on 5 or 6%...  Wouldn't that bite!

I wrote a post on my blog about all the recent market volatility. I credit it to computer trading, because all these programs tend to generate the same buy and sell orders, hence, allows the market volatility to soar through the roof.

Sounds like I am on the same wavelength as you!  Technology is sometimes intimidating!

Interesting stuff. Remember the flash crash?

Yes, at was amazing want!  I just goes to show the power and speed that these programs can do to bring a company, if not the entire stock market to its knees.

Yeesh. I can't say that this corruption surprises me but it also doesn't make me feel any better. I would have never known about this without you mentioning it. I think it is wrong to manipulate things for any reason but I guess when money is on the line, companies with throw all morals out to do what they can to make the biggest buck.

Yeah, I never thought about how computerized the market is now, but thinking about it, I wonder if the stock market is doomed to subpar returns.  I'm sure there are still opportunities, but only if you play the same game...  but on dips sell on rises..

Hopefully if this does happen, the government will see this and do something.

While I don't have direct knowledge, I have programming friend at work that was asked to write a program that basically would make a trader money by making the market go sideways.  This meant at as normal 401k investors put money into the system automatically, such a program would eat it up immediately. While the stock market still may goes up, it goes up at a much, much slower rate...

Does anyone have any additions information on this, especially at the hedge fund company levels?

Thanks in advance,

MR