You said "I would think that inertia is actually a bad thing for anyone designing a trading program, whether short or long, because money is actually made taking advantage of volatility, upward and downward.
Quite the contrary. The difference is between Those who want ownership of the markets components and those who wish to rent it. Trading programs are tools designed to aid the user, they are specific to the job. I've not seen anyone posit that the trades fadish tools as currently being used, match the job at hand, in fact i'd suggest to you that a good amount of these tools have been misused to the future ill effect of those deploying them.
Inertia is the state through which rotation happens using stealth and guile. This is the condition of this market. Its a battle of wills to be joined incrementally by owners who sense that the renters are complacent, their tools ill suited to the next task.
To those who want to own the market, Volatility is like a landlord facing a turn over of tennants, in some seasons his wisdom initiates the turnover in order to get higher rents, in others this same landlord may see a mass exodus of tennents anxious to leave for better value in the new complex down the block, in still others he lives calmly against the backdrop of average turnover peace and tranquility.
Inertia is that state in time where volatility shrinks into zones of consolidation, owners use this time to take as much stock and squirrel it away anticipating future profits from periods where contributions to volatility are under specific terms and will meet specific goals. The Owners are busy buying up the best property thanks to the inertia created by trading systems who they rent and will eventually move away from.
I think the players get used up about every decade or so, but the owners, they be there through every season, trend etc...
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