I wonder if the 0% trading fees at the largest exchanges (china & gox) is contributing to this misleading stability.
wouldn't it be more likely to cause instability greater swing trade gains
Can you explain by what mechanism that could possibly work? My experience and several academic papers would disagree with you.
For example:
http://m.rfs.oxfordjournals.org/content/25/11/3389.shortCompetition among trading platforms has considerably reduced trading fees in stock markets. We show that this evolution is not necessarily beneficial to investors. Although they increase gains from trade when a trade happens, lower trading costs can induce investors to post limit orders with a smaller execution probability. In this case, gains from trade are realized less frequently and investors can be worse off.
In other words, lower fees leads to a full book and thus more stability.
I thought because it was a break..from them not necessarily permanently 0% trading fees you'd see more variance.. pretty much what we saw when the bots weren't configured for it, Thursday.
Gox that is
I wasn't watching much on Thursday because I live in the US (Thanksgiving holliday). However, in the past temporary 0 fees on gox has generally led to more stability.
So if I understand correctly, you are saying that people will rush to trade since the fees will be going back up? There may be some truth to that, but the book will still be thicker, especially close to the price.
gox should have mentioned 0 fees earlier, the earliest i heard of this was today in an email from them (i guess like everybody else), one day after it's already started. if they had made it more public i expect there would have been massive fluctuations as people who want to get in would be that much more inclined to buy given that they would have gained an extra 0.6% btc, and the opposite goes for traders that want to get out (gaining 0.6% more fiat).
this is common sense, expect volatility
Your "common sense" contradicts my experience. Also, the email in my inbox is dated 11-28.