Markets

Minus a lead from Wall St overnight the local market closed softer Friday with the S&P/ASX200 index off 14.3 points, or 0.27%, at 5,320.0, while the broader All Ords index was down 12.3 points, or 0.23%, to 5,314.3.

Groundhog day with more records overnight on Wall St, the local market unable to hold onto the highs of the session, more economic data surprising to the upside and more developments in the Victorian cheese war.

After a fairly meek lead out of Wall St the local market has closed softer today with the benchmark ASX200 index down 25.7 points, or 0.48%, at 5,324.9. The wider All Ords index was down 24.1 points, or 0.45%, at 5,332.9.

After the Dow closed above 16,000 for the third day straight the local market followed suit today closing slightly higher, helped by gains by the big four banks.

On average volume the S&P/ASX200 index closed 15.8 points, or 0.3%, higher at 5,346.1 today. The broader All Ordinaries index was up 16.9 points, or 0.32%, at 5,352.8.

A record close on Wall St fed into the local market today with the S&P/ASX200 index ending up 47.6 points, or 0.9%, higher at 5,335.9. The broader All Ords was up 46.0 points, or 0.87%, at 5,330.3.

Four straight days in the red with the S&P/ASX200 off 19.4 points, or 0.37 per cent, finishing lower at 5,288.3. The broader All Ordinaries index was down 20.3 points, or 0.38 per cent, at 5,284.3.

Not helped by weak leads from offshore the local market sunk to a five-week low today. By the close the benchmark S&P/ASX200 index was down 45.2 points, or 0.84 per cent, at 5,307.7, while the broader All Ordinaries index was down 43.2 points, or 0.81 per cent, at 5,304.6.

After mixed leads from Wall St the local market opened softly and held that trend throughout the day. By the close of trade the All Ords had slipped 30 points or 0.6% to close at 5347. The ASX200 also gave up 0.6% to finish at 5352.

I dragged out the soapbox not too long ago to highlight some of the hypocrisy and ignorance surrounding algorithmic trading, and particularly high frequency trading. Today, it’s time to shine the light on dark pools. While we’re at it, it seems a good time to look at the real responsibility politicians hold for economic outcomes.

BHP Billiton (BHP)

Over the past year many market participants and commentators have railed against “Algorithmic Trading” (AT) and “High Frequency Trading” (HFT). Organisations using these trading methods are accused of at best, taking an unfair advantage, and in some cases, outright illegal behaviour. Unfortunately, most of these comments betray astounding ignorance, breath-taking chutzpah, or both.

This is close to my heart since I’m one of the people affected as I turned 60 last year and all my serious investments are in DIY Super. My time in the sun didn’t last very long, given a government desperate for revenue.

The casual observer of markets might think stockmarkets should be weakening heavily in the face of the North Korean “crisis” and the headlines appearing in newspapers predicting possible nuclear conflict and war in Korea.

If you’ve ever met someone who bought a car because they liked the way it smelled, or a house because it “felt right”, you’ve seen “economic law” defied. Have you ever entered a supermarket with a single purchase in mind, only to get to the check-out with a full basket of goods? If you have, you know that consumers do not always act rationally. Investors are the same.

During September last year, markets were capitulating under a weight of worry flowing from a potential default by Greece plus the deteriorating fiscal positions of both Italy and Spain