Today's Flash Crash in India

[Billy]

I wonder why we never see flash rallies?

http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/indian-stock-exchange-hit-by-mini-flash-crash/article4591825/?cmpid=rss1

Billy

[roberto.giusto]

I wonder why we never see flash rallies?


If it's true that HFTs make for more than 70% of market transactions and they add liquidity to the market having as a main purpose their ultra fast scalping game, while they subtract liquidity en masse when a panic situation triggers, this would only permit flash crashes and not the reverse case.

Not sure this makes sense, just guessing... :)

[Pascal]

Exactly! We have QE in perpetuity to slowly ramp markets up, but at the same time, we are at a nanosecond of an HFT triggered flash crash.

Welcome to the new trading environment, where the infinitely long and short time frames operate side by side!
To operate in very long time frames, you need to have access to unlimited funds (FED) and to operate in the nanosecond time frames, you need to have access to top notch technology (HFTs.)

In the middle, we have the shrinking number of traditional investors who are using TA and value based investment methods (The only possible advantage that we can trade on.)



Pascal