Back in the fall of 2008, the stock market collapsed and lost half of its value in a short period of time. One of the tells then is repeating itself: programmed trades at the end of the day are sell orders. Normally, the programmed trades are company retirement purchases where the price is not a concern. The broker gets the same commission based on the money invested regardless of the price of the individual stock and the end of the trading session benefits to the up side.
But as in 2008, people are starting to panic and are placing sell orders. The problem with these orders are that they are executed at the end of the day if they are part of the programmed trades mainly associated with mutual funds. In the past five days, the exodus is very apparent and people are finally getting out of the 1’s and 0’s. As in 2008, the trend is escalating.
David DeGerolamo
