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Hi Fred,
Monday, October 20, 2003, 6:38:20 AM, you wrote:
F> Market behavior will continually change after that ...
F> Change ? from what ? into what ? I guess this is the part I don't
F> follow. To me there is nothing new in market behavior now that
F> didn't exist last month, last year, last decade, last century, but
F> clearly those that take a short sighted view of history and the
F> market action that made up that history will clearly never see it.
F> It's a forest and trees thing ...
In terms of human behavior, nothing has changed, and nothing is
likely to change anytime soon. But there have been not-so-subtle
changes in market behavior. I would cite as one example, the
explosion in program trading. We all know this bogeyman has been
around for a while (remember, it was the scapegoat in 1987, when it
was just a small sliver of the total pie), but I wonder just how many
people understand what a market driver this has come to be, dwarfing
its influence of just a few years ago.
About a decade ago, programs accounted for about 15 percent of total
volume. Today, programs are accounting for more than 40 percent of
total volume (more than 500 million shares a day in the US, or nearly
the entire average daily volume of just a decade ago) and the
percentage of volume attributable to programs seems only to rise. So
there is one instance in which I would suggest that market behavior
has changed. However, I largely subscribe to the spirit of what you
are saying.
Yuki
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