I am developing this platform called HippoTrader. It is an Excel based market environment tool that is the result of working with my traders. One of the things that this tool allows is the scanning of the market as the market moves. So I decided to watch the market for the bear raid algorithm. Folks, this algo is on the European and North American markets.

Here is the usual pattern:

  1. 2% below the bid ask spread
  2. On any stock that is up
  3. On a day when the market is up

So this leads me to believe the following conclusions:

  1. Without disclosure of short positions I have become extremely wary of those who say that "the market is yet going to tank because the world is coming to an end." I wonder if those who speak these things are not running the algo.
  2. We might be in for a monster of a rally. A rip your face off type of rally, and it will happen VERY quickly, though I don’t know when.
  3. I wonder if the short play has become a momentum play.

This has lead me to wonder that maybe I should invest more into finding market micro-structures in HippoTrader…  Hmm….