Excerpt from the article:
Jeffrey Bierman, TheoTrade’s chief market technician and an adjunct professor of finance at Loyola University Chicago, has seen momentum-driven stock markets before, but nothing, he says, like this.
“It’s like the Roaring Twenties,” Bierman says. “The market has become a gambling casino. It reeks of discretionary income.”
Bierman blames the unhinged market he sees squarely on algorithmic trading that insitutions, banks, hedge funds and Wall Street firms favor. This blisteringly fast, programmed buying and selling is designed to take equally quick profits — in, out, rinse, repeat.
Bierman notes how the dominance of the “algos” — as these high-speed programs are known — has created a momentum-based, one-direction market that is severely concentrated in a handful of well-known stocks, mostly technology names.