Computer Led HFTs Dominate Rally
The market’s overall rally has been attributed to a massive short squeeze primarily led by HFTs. This is easy to believe, still it makes you want to shut them down. If the rally is real, the supporting news will follow the trend. If there is none then we’ll be heading south again methinks.
According to a note from Goldman Sachs the previous week, they state a rally could happen if two conditions were met: ongoing share buybacks financed by cheap interest rates and earnings saw improvement. The latter is represented below with no comment.
If earnings should improve you wouldn’t know it from Alcoa’s S&P 500 lead-off earning’s report. The stock was even weaker than three previous earnings downgrades. The stock fell nearly 6%.
Friday, two Fed Governors took the stage to assert some weird ideas. Fed Governor Evans tried to demonstrate via a strange dot chart that the economy was strong, without explaining the “dots” adequately if at all. And then he contradicted himself by saying the Fed should keep rates low until the end of 2016.
Then Fed Governor Lockhart gave us the quote of the day: “…understands why people may get a little skeptical of the Fed”.
A late burst of buying Friday allowed stock indexes to rally once again. This will push overbought conditions to new heights. The big winner on the day were long beaten down commodity markets.
Market sectors moving higher included: Transports (IYT), Tech (QQQ), Biotech (XBI), Brazil (EWZ), Hedged Japan (DXJ), South Korea (EWY), Germany (EWG), Spain (EWP), Eurozone (EZU), Australia (EWA), Malaysia (EWM), Mexico (EWW), Canada (EWC), Indonesia (IDX), Singapore (EWS), Vietnam (VNM), Thailand (THD), Gold (GLD), Gold Miners (GDX), Silver (SLV), Base Metals (DBB), Euro (FXE), Swiss Franc (FXF) and more.
Market sectors moving lower included: Dollar (UUP), Energy (XLE), Oil & Gas Exploration (XOP), Financials (XLF), Banks (KBE), Regional Banks (KRE), Utilities (XLU), Semiconductors (SMH), Crude Oil (USO) and others.
The top ETF daily market movers by percentage change in volume whether rising or falling is available daily.
Volume was lightest on the week thus far and breadth per the WSJ was modestly positive.
According to a note from Goldman Sachs the previous week, they state a rally could happen if two conditions were met: ongoing share buybacks financed by cheap interest rates and earnings saw improvement. The latter is represented below with no comment.
If earnings should improve you wouldn’t know it from Alcoa’s S&P 500 lead-off earning’s report. The stock was even weaker than three previous earnings downgrades. The stock fell nearly 6%.
Friday, two Fed Governors took the stage to assert some weird ideas. Fed Governor Evans tried to demonstrate via a strange dot chart that the economy was strong, without explaining the “dots” adequately if at all. And then he contradicted himself by saying the Fed should keep rates low until the end of 2016.
Then Fed Governor Lockhart gave us the quote of the day: “…understands why people may get a little skeptical of the Fed”.
A late burst of buying Friday allowed stock indexes to rally once again. This will push overbought conditions to new heights. The big winner on the day were long beaten down commodity markets.
Market sectors moving higher included: Transports (IYT), Tech (QQQ), Biotech (XBI), Brazil (EWZ), Hedged Japan (DXJ), South Korea (EWY), Germany (EWG), Spain (EWP), Eurozone (EZU), Australia (EWA), Malaysia (EWM), Mexico (EWW), Canada (EWC), Indonesia (IDX), Singapore (EWS), Vietnam (VNM), Thailand (THD), Gold (GLD), Gold Miners (GDX), Silver (SLV), Base Metals (DBB), Euro (FXE), Swiss Franc (FXF) and more.
Market sectors moving lower included: Dollar (UUP), Energy (XLE), Oil & Gas Exploration (XOP), Financials (XLF), Banks (KBE), Regional Banks (KRE), Utilities (XLU), Semiconductors (SMH), Crude Oil (USO) and others.
The top ETF daily market movers by percentage change in volume whether rising or falling is available daily.
Volume was lightest on the week thus far and breadth per the WSJ was modestly positive.
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What a week! And, it’s hard to know if it’s all just a short-squeeze or something more durable. Really, and for the most part, HFTs are behind the short-squeeze rally. They can easily go in the other direction in a millisecond.
With the last push on the day, algos gave us another reason to know how sharply overbought conditions are.
Let’s see what ha
ppens.
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