Recap of 60Minutes Segment on High-Speed Trading.

Last night, after a Tennessee/Dallas game that ran over, and CBS’s decisions to go to the final minute in another NFL game, the Show that counts the seconds ran its piece on trading measured in millionths of seconds. The report was balanced, and highlighted the thinking of several great minds (Schapiro, Kaufman, Saluzzi, Liebowitz, and Narang). If you did not see the piece, you can see it here: 60Minutes on HFT.

Their viewpoints?

Chairman Schapiro: it is natural that we will be looking at this closely, as just one small algo going wrong can affect so many investors.

Senator Kaufman: Transparency and Fairness Must Always Trump “Liquidity”.

Saluzzi: Make money every day, day in and day out, using paid-for advantages? They see order-flow before everyone else, and nothing is wrong? How can you not be concerned with pricing in the markets now?

Liebowitz: There has always been concern about front-running and manipulation in the markets; now its just done by an unknown computer that no one can possibly fathom how it works, and it is done uber-efficiently. PS how do you like the new digs?

Narang: We have the same goal and right as every other player in the market to make money. Our offices are nicer than Saluzzi’s. Did you look behind Croft and see the crooked pictures and drawings taped to their walls?

Seriously, I hope everyone wakes up with a healthy concern and asks questions of those controlling their savings and nest eggs. The market is big enough for everyone, provided the playing field is fair, and the refs are independent, as opposed to staked.

By the way, there were two related pieces in Barron’s this weekend:

The Real Flash Crash Culprits:

Real Flash Crash Culprits

From Bankers to Speculators, an editorial by Steve Wunsch:

http://online.barrons.com/article/SB50001424052970204044404575479704056364196.html

Where we left off 4:00pm EST:

DJIA                                             11,006.48                                      +57.90

S&P500                                          1,165.15                                       +7.09

NASDAQ Composite                     2,401.91                                       +18.24

Futures now at 7:30am EST:

DJIA:                                       +23

S&P500:                                  +2.40

NASDAQ 100:                       +5.25

Key Data out today: 

 

07:30:                          NFIB Small Business Optimism

10:00:                          IBD Economic Optimism

14:00:                          Minutes of FOMC meeting

 

Since the prior close, some key stories:

 

–          Commodities rise (sugar and corn).

–          IMF does nothing over the weekend; continues to kick the can down the road.

–          Nasdaq “thought about” buying CHI-X. Might still care…

–          Paladino continues to put foot in mouth (“Children shouldn’t be brainwashed into thinking homosexuality is ok”). Cuomo does an arm pump.

–          AAPL is 20% of the QQQQ’s.

–          Bond markets closed for Columbus day; equity markets open as the bots are programmed in Irish (O’Caml).

–          Yankees – Phillies rematch shaping up?

–          NASDAQ removes order ID’s on hidden orders. Are they still keeping the buy/sell indicator? We need to check out the spec in detail.

–          China buys piece of Chesapeake energy.

–          Egypt to issue first SUKUK guidelines (The issuing of dollar denominated Islamic bonds).

 

Earnings:

 

Pre-open:                    None

After Close:                GPN and ZEP