posted 06-24-2000 10:39 AM         

quote:

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Originally posted by ag8ion:
I got out of equities early this year on the advice of the market timer that I subscribe to. For a while I thought he had blown it for the first time in about 10 years that I had been following him. The techs kept screaming up, and the bonds that he recommended inched higher. Now after 6 months of stomach churning agony (for some) I find that my bond positions have appreciated by about 15% in 6 months and it's been accomplished will little worry.
His latest update talks about a coming crisis in the equity markets which I will thankfully avoid. His sight is an interesting one for anybody that's interested. http://www.jasmts.com/visitor/

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posted 06-23-2000 10:34 AM         

Just my thoughts. It's from upside:

Volatility is on the rise
By Thomas Coyle
06/23/00

NEW YORK -- Although the Nasdaq's fall on Thursday has to to be placed firmly in the context of its 1,000-point run-up since touching its year-low on May 24, it brings into focus an increasingly pronounced characteristic of the market: Volatility is on the rise.

Choppier than ever: "Last year, for the whole of the year, the Nasdaq had 61 trading days with a greater than 2 percent change on a closing basis," Tobin Smith of ChangeWave told UpsideToday.

"This year, we've already had 66 trading days with more than a 2 percent change," he said.

ECNs: That's because of the increasing popularity of electronic communications networks -- such as Island and Instinet -- as brokers for retail trading, which, at least on the Nasdaq, can account for as much as 65 percent of trading on any given day.

Today for instance, 43.6 million shares in Microsoft (MSFT) changed hands on the Nasdaq. But 9.1 million shares, or 20.9 percent, of those shares, came through Instinet, an ECN owned by Reuters.

ECNs market themselves on their "neutral position in all transactions," as Instinet puts it in its website blurb -- which means that they effectively cut the market maker out of stock transactions.

Middlemen: Market makers buy and sell securities in hopes of turning a profit from a rapid turnover in security positions rather than from holding those positions in anticipation of gradual price movements. The overall effect of the market maker's transactions is to stabilize share prices by stepping up and committing its own capital when no match is found between a bid and an ask.

"As more trading goes to ECNs, it reduces the spread -- the spread between bid and ask on the ECNs is virtually nil," said Smith.

"And that creates volatility, an auction -- in an auction if no one says 'yes,' the price just goes down," he said.

"The rise of the ECNs and the rise of volatility are perfectly matched."

posted 06-19-2000 06:01 PM         

In brief: