The Dow Jones Industrial Average is rebounding, but computer trading bots are alerting investors to short everything.
Trading Bots Suspicious of Dow Winning Streak
According to quantitative investment firm AlphaSimplex, algorithmic trading bots suggest shorting three major asset classes: stocks, currencies, and commodities.
“Pretty much any way you run the models, you end up net short a lot of asset classes,” Kathryn Kaminski told the Wall Street Journal. “This is like the chaos bet.”
Kaminski is the chief strategist at AlphaSimplex Group in Massachusetts. She says the last time the trend-following computer trading bots reversed positions so dramatically was in 2007 and 2008.
According to Kaminski, the algo trading bots have moved from holding long positions in stocks, currencies, and commodities in the third quarter of 2017 to shorting them by 2019.
In other words, the bots are betting that those asset classes will drop, signaling a potential sell-off.
The process is already underway, and if institutions continue to resist change, the less leverage they will get to enact it once they desperately need it. The risk is replacing USD hegemony for (e)-Yuan hegemony. I would certainly prefer a more open system of interoperability.
I also believe such systems will need to be interoperable with open market cryptocurrencies at some point. Both can coexist as they serve different purposes.
What do you think?
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Re: Andreas Antonopoulos - "Financial: Inclusion, Independence, Freedom 4 all!
Andreas Antonopoulos - "Financial: Inclusion, Independence, Freedom 4 all + BORING blockchains"
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