zero hedge Sun 2010-05-09 09:42 EDT

Themis' Take: May 6, 2010 -- The Day That Will Change Market Structure

...The story is not a key-punch error. The story is a failed market structure. The market failed today. The market melted down and ``liquidity providers'' quickly pulled all bids. According to today's Wall Street Journal, high frequency firm, Tradebot, closed down its computer systems completely, as did New Jersey's own Tradeworx,...To make matters worse, while some high frequency firms shut down yesterday and pulled their bids, as we warned they would do for over a year and a half, other high frequency firms turned from being liquidity providers to liquidity demanders, as they turned around and indiscriminately hit bids...The market action of May 6th has demonstrated that our equity market has major systemic risks built into it...The price discovery process ceased to exist. High frequency firms have always insisted that their mini-scalping activities stabilized markets and provided liquidity, and on May 6th they just shut down. They pulled the plug, as we always said they would, and they even admit it in the papers this morning...This is not an isolated incident, and it will happen again.

2010; 6; Change Market Structure; day; take; Themis; Zero Hedge.

Sun 2010-01-31 11:43 EST

Hussman Funds - Weekly Market Comment: The Stock Market Has Never Been This (Intermediate-Term) Overbought - October 19, 2009

In reviewing the status of the market late last week, the condition of the data was something of an anomaly in that regard. On the valuation front, stocks are presently overvalued, but to levels that we've observed at least several times in history. The anomaly relates to market action, where we can no longer find a single historical instance where stocks were more overbought on the combination of short- and intermediate-term measures we respond to most strongly. Indeed, only one instance comes close, which is November 28, 1980...the peak of the furious advance in S&P 500 driven by enthusiasm over "less bad" economic news, though with little proven economic strength. It was the last day of the 1980 bull market. The economy later proved to have been in a short lull within a double-dip recession, taking stocks to their final lows in 1982...One of the notable features of extreme overbought conditions is that investors rarely have much opportunity to get out...

2009; Hussman Funds; intermediate term; October 19; Overbought; stock market; weekly market comments.

Wed 2009-02-11 00:00 EST

Hussman Funds - Weekly Market Comment: Market Action Abruptly Signals Renewed Caution - January 19, 2009

2009; Hussman Funds; January 19; Market Action Abruptly Signals Renewed Caution; weekly market comments.

Mon 2008-05-19 00:00 EDT

Hussman Funds - Weekly Market Comment: Poor Fundamentals with Borderline Market Action - May 19, 2008

appeasement defined; 2003 arguments against war, in favor of diplomacy

19; 2008; Borderline Market Action; Hussman Funds; poor fundamentals; weekly market comments.

Tue 2008-05-13 00:00 EDT

naked capitalism: Is the Commodities Boom Driven by Speculation?

commodities veterans distressed by recent market action; role of new cash and ETFs in commodities boom questioned; commodities industry analyst Michael Frankfurter examines financialization of commodities

Commodities Boom Driven; naked capitalism; Speculators.