The amount of speculation and high risk distributed in the market by pension funds and insurance companies is creating a very dangerous situation, and it might not be far away teh day like in 2001 when England pension system was at peril becuase insurers and pension funds were invested in the stock market at levels that they should not, part of the opposition to Blair in england comes from pensioneers.
The Soros nightmare was coming back to the englishman in the form of lost retirements by gambling managers.
Due to the large size of this accounts, managing the positions is 100% done by computerize formulas with individuals calling the depth of the trades.
With this in mind you might see trickle 100 lots non-stop in the level II screens, stocks like CSCO and MSFT that are part of the favs of this crowds show the most clear pattern of what it means hedging.
The speculation is good for gaps, it creates larger entry points, and when prices are programed in computers to have reduced risk creating hedging with options/short positons that also accelerates the gap size. Sometimes as yesterday TEVA was sold at 12% dsicount to news today to buy TEVA one will have to put a buy price in the <5% range of yesterday closing for a >4% not a bad idea but the risk range is 70% reason why I shy away today.
I will suggest to read charts with technical and fundamental analysis to grasp this idea of selling in 4 to 7 % ranges.
As I said this fits me and it is not intended for anyone else.
If you want to follow it set up in any of teh financial sites around a portfolio
and paper play it.
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