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Minyan Mailbag: Artificial Market Action


...ultimately, market forces win out.


Professor Succo,

Somehow (in a poorly defined way), much of the market action seems 'artificial,' a deviation away from the little mathematical consistency that seems logical. The tick patterns never show any sustained selling. Overbought or oversold, dips are bought with regularity. Snapper is the ruling critter. Surprising? Hardly.

Thank Intelligent Design for having created the small oasis of sanity that you guys bring us.

Minyan Ron

Holiday wishes for success to you and yours.


I feel the same way.

To an ever expanding government and active central banks, markets are subject to intervention on a regular basis. This is nothing new, but it seems more "creative" than ever. Policy makers are just of the opinion that they can control markets according to their policy.

Various nuances like tick data, volatility and sustained macro imbalances indicate that intervention is very heavy.

And the more aligned those central banks are in policy, the longer they can control markets.

But ultimately, market forces win out. The compression built up by intervention is overcome: markets are ruthlessly rational in their pursuit of supply and demand.


No positions in stocks mentioned.

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