The rise of the (trading) machines

Posted: August 17, 2018 in Uncategorized

Yesterday was a telling day. The violence of the move (in relation to the crisis and data) has been stunning.

Telstra +6%, Iluka Resources close to -8%, Walmart +9% etc etc.

We are in a low volume period (between 15 August and 3 September, US Labor Day) and the machines are reigning supreme.

All commodities and related shares were under full pressure. Algos trading was around 85% of all trading
Why do I accuse the machines? Apart some data I am receiving – there are large discrepancy in the US/UK ADRs behaviors that are a tell tale – as the machines are working more on the US/UK markets.
BHP US  Australia -2.55% BHP London -5.22% and BHP US -4.82% (the difference is just the Pound vs USD)
Even more telling and with a real source is TENCENT
Tencent USA -10.22%
Tencent HK -3%
The only difference is that, as the China (and HK) market are down almost 30% – the Bank of China last week increased the deposits for short position in China related positions to 20% – so any machine attack in China has become 20% more expensive.
The Reserve banks should foollow China and regulate more the algos – or they will become the culprits of the GFC 2.
And as you know from the movies they will take no prisoners.
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