I officially hate financial market moves on no-news. Yes, yes, everyone said that today’s correction was due to overseas market corrections that were in response to big moves in currencies. OK, so what caused the big move in currencies? There was no news.
It’s much more likely that the financial market moves were triggered by computer trading programs and certain algorithmic thresholds being crossed. It’s estimated by folks from the SEC to the Wall Street Journal that on average 70% of trading is executed by computers. Many of the trades are ordered and executed in less than a second. Other than selecting the initial trading criteria, human beings are not involved at all. This means that momentum begets momentum. Which, in turn, can lead to euphoria and panic when human beings take big market swings seriously. Ugh!
Soapbox dismounted.
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