99.9% of all quotes on the exchanges and 70% of all trades completed are done by HFT. This means that there is literally nobody on the other end of the trade you are placing.
If you are indeed looking to "get rich quick" (over the next 10 years), my advice is to find a system that (a) works well most of the time, (b) you can thoroughly understand and can live with during good times and bad, and then (b) stick with it - yes, even when the going gets tough.
According to a report I saw out of NANEX yesterday, 99.9% of all quotes on the exchanges and 70% of all trades completed are done by HFT.
I prefer to rely on the objective readings of my models when making investment decisions. This approach may not be right for everyone, but I must admit that the models do tend to get most of the big moves right and as a result; I tend to sleep pretty well at night.
A quick glance at the scoreboard should remind investors that things aren't all that bad right now either. The S&P 500 is up +11.76% on the year and the NASDAQ (QQQ) - thanks in no small part to Apple (AAPL) - currently sports a gain of +16.76%.
In the case of one uber-bear in particular, we were told that nothing short of a global recession would ensue if either of our two superhero bankers dared to disappoint the mighty markets.
History has shown that whenever things get ugly - I mean really ugly - the Fed's cavalry has always mounted their white horses and come to the rescue with plans to stimulate the economy, which, of course, caused stock prices to improve.
We all know that Mr. Bernanke likes to lead the cavalry charge to come to the rescue when things look bleak.
In listening to Mr. Bernanke's Q&A with the Senate Banking Committee yesterday, it occurred to me that the path forward is now fairly clear.
If another round of QE is announced (or even hinted at), traders are going to buy what has worked the last three times and push "risk assets" higher. You can count on it.
The sentiment toward the global macro outlook is dour and fear is in the air. Nouriel Roubini is out with a new forecast suggesting the sky will actually fall this time around.
Yes, you are correct; applying one of literature's most famous quotations to the problems facing today's central bankers is the very definition of trite. But after reading the four lines and making the referenced substitutions, I'm guessing even an Econ 201 student can see what I'm getting at.
The U.S. remains the best house in this growth-slowing neighborhood.
Wall Street traders are nothing if not adaptable. So, it wasn't terribly surprising to see stocks sell off in earnest over the ensuing half hour. It became clear to me that SCOTUS was worth about 9 S&P points.
It certainly feels like "déjà vu all over again" right now as we're seeing the same pattern and the same issues/concerns, all at exactly the same time for the third year in a row.
