3PM is Adult Swim, Humans Get Out of the Pool

Yesterday was a great example of a new characteristic of this market that is truly disturbing – I’m calling it “Adult Swim“.  On many days, at or around 3PM, the market becomes unsafe for human beings as the churning  high frequency trading machines jump in to do their thing.  This is like the public pool, when all children are called out of the water so that the big kids can cannonball and thrash about – the lifeguard blows his whistle to signal that it’s time for Adult Swim.

On many recent days, we’ve seen the program traders run amok in the last hour of trading, hitting stops and just generally bringing the ruckus.

Take a look at yesterday’s intraday chart of the major averages below for an example:

The damage to the psyche of individual investors and the “slow money” that used to support the markets is snowballing into what may become an outright protest.  The $25 billion in US stock mutual fund outflows since the beginning of May is the body I’ll produce as evidence of a crime.

My question to the proponents of the tradebot society is this: 

Once you’ve chased the last 401(k) holders, the last retail investors, the last retirees holding blue chips out of this market, whom will you trade with?

Whose stop loss orders will you discover and trigger?  Whom will you abuse and scalp?  Each other?  Actually, I’d very much like to see that.

The 3 PM Adult Swim hour is destroying what last shreds of faith in this market remain.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. rolexreplika.pl commented on Sep 18

    … [Trackback]

    […] Read More on to that Topic: thereformedbroker.com/2010/06/10/3pm-is-adult-swim-humans-get-out-of-the-pool/ […]

  2. Electricity Plans commented on Oct 26

    … [Trackback]

    […] Read More on on that Topic: thereformedbroker.com/2010/06/10/3pm-is-adult-swim-humans-get-out-of-the-pool/ […]

  3. digital transformation commented on Nov 18

    … [Trackback]

    […] Here you can find 55673 more Information on that Topic: thereformedbroker.com/2010/06/10/3pm-is-adult-swim-humans-get-out-of-the-pool/ […]

  4. 토토 commented on Dec 22

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2010/06/10/3pm-is-adult-swim-humans-get-out-of-the-pool/ […]

  5. cancer hemp oil commented on Dec 22

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2010/06/10/3pm-is-adult-swim-humans-get-out-of-the-pool/ […]

  6. JAI CV-M30 manuals commented on Jan 20

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2010/06/10/3pm-is-adult-swim-humans-get-out-of-the-pool/ […]