When looking the current patterns and the make-up of the market participants of this volatile spinning market, various trader profiles emerge from the past. I am not talking about the trader folks on Wall Street coming out of Ivy League schools who transact and call it trading. I'm talking about the real traders with skills honed in trading pits. Tough, big mouths who love to be miserable. Who always complain about being abused by the market as if they never made a dime. The big pit traders with hands in or out willing to step into a big trade, as long as it is winked into them quickly in busy markets and few see it. Then complain that every one else in the pit is a scumbag for not making a market for them when they needed to pick someone off. The constant bulls who have no particular trading skills and are only a little more stupid than the forever bearish who at least has some self respect. The moderate size trader, neither bull nor bear, who likes to dress himself rather than be set up by a filling brokers. The small trader who thinks everyone is an idiot for trading but makes more money than anyone else.
Trading is tough. The black box strategies speed up the game and change the profile of the market a bit. It is now filled with the ' modified bull/bear high frequency get some transactional kickback oh yes sometimes we cross orders but the exchange does not care' traders. And when groups of high frequency traders get together with everyone else, the market spins like a greased beach ball being passed along by throngs of market concert fans. Algorithmic trading is not a negative as some believe. Increasing volatility usually expands opportunities if it has corresponding increasing volume, which is certainly the case today.
Analyzing the markets has become great theater. Lately, the continuing drama of gloom is being portrayed by pundits such as CNBC's Ron Insana, who may come to be known as ' the great extrapolator' for his visionary work in connecting all stocks in a straight line down. Listening to Insana talk, one would think there is some incomprehensible misery lying ahead incapable of being repaired without some historical downside cleansing. What is clear is that Ron probably learned everything he knows about trading from reading a teleprompter. Trying to catch it all in some dire broad macro analysis is easy but lazy. Pointing a big arrow down is entertaining for some but ultimately valueless. Insana and others credibility are now invested in disaster. Tough trade.
