The Wall Street Rebel

The Tools

August 7, 2020 11:07 PM RSS

Dedicated to delivering institutional quality market analysis, investor education courses, news, and winning buy/sell recommendations - 100% FREE!

The Machines Are Getting Warmed Up

Wall Street Rebel | Geoff Garbacz
12/29/2019 9:59 PM

One of the most important facts to remember is that you are trading against machines. Over 70% of daily trading is machine driven. That means you better understand how the machines trade. That is why we created Gold & Energy Options Trader and Options Index Trader. We use the leverage of options to make multiples of moves in various indexes and stocks.

A key metric for us to watch is intraday action. We noticed a pick up of machine driven trading on Thursday and Friday. The key characteristic of volatility on an intraday basis is more directional swing. Below is a simple each of Friday trading in the S&P 500 via SPY.

We also notice more directional trading on Thursday.

There were also five moves. The more swings we get the more the machines will get active as they love the volatility. So the conclusion is more directional changes took place post Christmas. Tomorrow we will look at another characteristic of the machines getting more active.