Only because some things need repeating…
From my article, “Say Goodbye To The ‘Easy Button'” To wit:
This isn’t to brow-beat, or berate a point. What I’m trying to do is point out a very important fact, for the implications are what’s important, and it’s for the following:
Not only is Wall Street currently populated with more “never seen a down market” types than probably any time in recorded history. (Think most, if not all, so-called automated, goal based investment platforms, or brokers.) There’s another variable that’s even more chilling and it is this: There’s barely any people trading at all. i.e., It’s all machine trading based on pure algorithmic formulas. And the power (i.e., QT: quantitative tightening) to fuel those machines is being reduced. And that’s not all.
These “algos” per se, have been constructed and tested in much the same way. i.e., By recent college grad, math whizzes. And here’s another important factor: All during a market that only knows central bank largess.
Don’t gloss over that point. Truly contemplate the implications, it’s worth the time, if not the possible savings of one’s future bank balances.
Point One: “Think most, if not all, so-called automated, goal based investment platforms, or brokers.”
The resulting proof to back up such words for caution? Again, to wit:
(Non-working Screenshot – Source)
Point Two: “There’s barely any people trading at all. i.e., It’s all machine trading based on pure algorithmic formulas.”
The result? Via CNBC™, to wit:
“The first thing to know about the stock market’s eye-watering slide Monday is that it wasn’t caused by anything fundamental.
There was no particular piece of news that drove the major averages to capsize, in a move that sent the Dow industrials off more than 1,500 points — a new intraday record — briefly in the final hour of trading.
Instead, the market took on a mind of its own, where sentiment and likely some computer-programmed trading sent Wall Street into a bizarre tizzy. Fear brewed over a number of issues, with the biggest being trepidation about rising interest rates even though government bond yields actually were lower on the day.”
Point Three: “These “algos” per se, have been constructed and tested in much the same way. i.e., By recent college grad, math whizzes. And here’s another important factor: All during a market that only knows central bank largess.”
The result? Via Nomi Prins. To wit:
“This debt creation can’t sustain itself forever. It doesn’t take but a tiny mistake by central bankers to throw the bond markets into disarray.
Equity markets don’t always follow right away, but they will eventually follow. And these past few days, equities marched in lockstep with the spike in bond yields.
The Fed’s balance sheet reductions until now have basically been a rounding error. But last week, the Fed sold $22 billion of assets. Is it a coincidence that stocks sold off?”
Bonus point, from my same article: “What do the machines seem to do when a market rout is on? Hint: “Pull plugs,” or my personal favorite, suddenly “break.”
The result? Via Eric Scott Hunsader. Again, to wit:
(Non-working screenshot. Source listed above)
And for reasons I believe are both relevant and important, Bonus, Bonus Point, from my article “Now It’s Bicoin’s $10K Dillema”
“If you think that’s a retirement vehicle or strategy you can bank on? May I interest you in some ocean-front property I have in Kentucky that I’ll let you have, cheap? (Sorry, but cash only.)
Now that Bitcoin has revisited prices beginning with $9, rather than $20? Look for prices in the 8,7,6,5,4,3,2,1,_? coming sooner, rather than later, in the very near future.”
The result? Via GDAX™. To wit:
(Screenshot taken on 2/6/18)
Or said differently…
© 2018 Mark St.Cyr