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[Tuff-Stuff]

Ritholtz< Rookies Manning the Terminals

When you are trading on a Level III Terminal, you can see the full order book and market makers.

But the mother of all rookie trading sessions was the week between Xmas and New Year’s Day. Anyone worth a level 3 was gone, and the rookie kids (like me) left manning the terminals were given strict orders: Don’t Screw Up

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I suspect the action we are seeing today is similar — the kids are running the show, and no one wants to take a hit. Josh called this week Garbage Time, and I agree. I also imagine some of the big long only full invested shops (i.e., Mutual Funds, Pensions, etc.) have a standard practice for the traders that states “Any day X happens, do Y.”

When we sold off over 1% yesterday on essentially no news, these buy programs may have kicked in. If cash is sitting around, but the PM and the fam are lying on a beach, that’s how it happens. Hence, yesterday’s ugliness and reversal.

Be cautious about reading too much into the action this week or Monday. A full reboot awaits us all next Wednesday, January 2nd.

FULL http://www.ritholtz.com/blog/2012/12/rookies-manning-the-terminals-2/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29