What the trading programs can't see

To a great extent, automated trading programs are driving the stock market.  They are blind monsters out to buy new highs, capture dividends and just keep on obeying the inputted programming and algorithms.  They put money to work for the simple reason they have been thrown vast sums of money to put work. (Thank you Ben Bernanke) Program trading, and short sellers, were the boogey men of the 07-08 markets.  But the critics are all silent now because the direction of the market is more palatable.  The fickle critics should hold just as much concern now as they once did. The days of "tape reading" traders is over.  "Quants" crunching numbers and programs fearlessly taking massive risks are the style today and have been for quite some time.  But there are some inputs these computers are not capable of considering.  There are risks that can not be quantified and thus can not be programmed. The geo political tinderboxes that sprinkle the world today...(Read Full Post)