Thursday, June 24, 2010

Cramer's Mad Money - The Pajama Game (6/17/10) -- Seeking Alpha

(c) 2010 F. Bruce Abel

"Ludicrous." This concept of ludicrous "Pajama" traders is newish with Cramer.  Read further. Wait just a minute! Can he be serious that there are enough of them -- I'm one -- to match the really active hedge funds that are trading off milisecond-actions?

He needs to do a lot more on this topic to fully flesh it out.

Cramer's Mad Money - The Pajama Game (6/17/10) -- Seeking Alpha: "Cramer said the 'pajama game' was responsible; traders who sit at home in their pajamas with their laptops and trade at a furious pace with the wrong information. Double and triple-leveraged ETFs only exacerbate the problem.
Cramer has spoken before about the problem of high frequency trading which now comprises 80% of trades compared to 30% 4 years ago. False information can make unsustainable rallies given the intensity of trades. For instance, traders started buying because the CurrencyShares Euro Trust (FXE) seemed strong, but the euro was stronger only because of bad news on the home front.
It doesn't help to be the voice of reason when trades are made in a flash. Unfortunately, for now at least, the fate of stocks “rests in their ludicrous hands,' said Cramer."