Odd ball trading pattern

     Is it me or do we seem to be in an odd ball trading pattern since early August?  Since the plunge in stock prices in early August we have been range bound eerily like it is controlled by a computer.  Every time we approach the 10,700 mark on the Dow we pop right back up again to 11,500 range within days.  Is this program trading?  Futures trading?  ETF influence?  

     I am not sure what is causing this 10% trading range.  One thing I have noticed a lot lately is that market trades seem to end in weird digits.  A perfect example happened this week when I placed two market trades for Walgreens on September 28^th.  They were round lot trades for 100 shares each coming within a few minutes of each other.  Instead of getting prices like $33.12 or $33.275 I got prices like $33.1197 and $33.1171.  To me these look like front running trades where a superfast computer sees my order and buys the shares before me and sells them to me at a fraction of a cent more.  Not much of an issue from my standpoint since these are buy and hold trade I plan on holding for 18 months plus.  Pure profit for the traders.  They claim they add liquidity but to me this is the banks acting like a tick sucking off money.  Ultimately the SEC will need to act to stop this abuse.

     What concerns me the most is the frequency that I am now seeing this happen.  I have to start questioning are these front running of trades plus algorithm trades done by hedge funds manipulating the market and causing it to be range bound?  I have noticed that many of my friends who used to actively trade shares now rarely mention any stock holdings.  Many I know have totally left the stock market to use the cash to purchase real estate now that that asset is near historic lows.

     Given the Federal Reserve desire to manipulate the interest curve and finance in general to falsely prop up the US banking industry and theoretically the economy, I am wondering if this iss part of Operation Twist.  Could they be giving large banks money to help prop up the stock markets?  I am totally speculating here but I would not think I am too far from reality.

     History shows that whenever someone tries to manipulate the market it always comes back and bites them in the ass.  Knowing this and speculating about the above would it be wise to purchase some short ETF’s now?  I leave that to you to work out.

Full Disclosure

     I own shares in Walgreens (buy and hold mentioned above) and a couple of short ETF’s and Bear funds.  I am weighted about 60% short or cash and 40% long.