Are large traders destroying the market ?

Alan farley writes: (Full article here )
Machines. Finally, let’s talk about program trading and the ultra ETFs. I’m squarely in the camp that believes these two factors, taken together, are destroying the fabric of the worldwide market structure. Beyond that, they’ve frightened away huge amounts of public capital that now believes they can no longer compete in the financial markets.

As far as I’m concerned, this is a clear case of manipulative activity that goes against overriding public interest. It’s destroyed the auction place by creating synthetic market inefficiency — i.e., the ability to control price direction through brute force. Sadly, I have little faith that our regulatory officials will ever comprehend the sinister power of these destructive bots.

My Notes: A few months back, with SEBI permission, the NSE allowed large entities to automate their trading process, providing for progam trading. Is this damaging the Indian market ? Most probably, yes.

One day rally ?

For Day Traders / Swing Traders
The Nifty rallied on Tuesday, justifying a buy suggestion given on Monday evening. On Tuesday, the Index opened at its lows and closed at its highs. This one day pattern is either (a) continuation signal in an uptrend, or, (b) likely resistance in a downtrend. Since we are in an intermediate downtrend, tuesday’s price action suggests resistance is likely to come in on wednesday. The strategy should be to sell into strength. Strength may also be defined by a mildly ‘overbought’ position in intraday oscilaltors. Professional traders might like to develop this concept further.

For Everyone:
The Nifty has been making a pattern of lower highs, lower lows. The previous high was made at 2870. A close above 2870 will change the intermediate trend to up. Any rally will again face resistance at 3150. The target for the current down move is 2450.