The Black Box

[Chris McConnel]

From Realmoney.com:

The Program-Trading Effect
Rev Shark
8/04/03 02:52 PM EDT

Program-selling was blamed for pushing us down, and it now looks like a big program-buyer is pushing us up. There is talk of a large firm actively buying the S&P futures. Once they get them running, that triggers the buy stops and shifts momentum. Breadth has improved, but we still have 3,700 losers, which helps confirm that idea that this is a futures-driven bounce rather than widespread "dip buying."

One thing is for sure, the bears have to be frustrated. It looked like a technical breakdown was at hand, but we are now back up over the critical levels, and the selling pressure has dissolved.