the dow making a rebound surging 1000 points at wednesday s close, you can call the christmas eve crash. could this roller coaster wave the result of computerized trading, 85% of the market coming here to break down his tips is cpa and financial analyst dan gilden. explain what computerized trading is. you have computer algorithms which are set so they are predetermined marks for buying and selling so what happens is when the market or certain stocks a point in time, bank, the trading starts and what happens, what you saw yesterday in terms of this rush of buyers into the market is because there were so many people with similar buying points and once it had that the algorithms, the computer started buying and buying and buying and that is the result we have. how does a person other
watching deal with that, overcome that so their financial future is as secure as possible? what into happening is there is becoming an emphasis on trading as opposed to investing in that is problematic. you need to spend time with your investment advisor to figure out what is your investment goal and stick with that and computers do what they do. you have some funds out there that are 100% driven by computer algorithms. you are taking a huge factor out of investing at this point. looking ahead to today there i ask you what happens or are we at a point in our financial world where if you even begin, if you are the smartest guy in the room and begin to predict what is going to happen you will have egg on your face at the end of the day? the president with out-of-pocket so it ended up being a quiet news day.
it s like hey, let s go crazy here. down 380, 410 and then 700. yeah. you and i discussed this. we ve been cited saying the same phrase. like this is the new formal as more and more computer algorithms are taking over. people decide which levels they want to sell. more and more computer trading is guiding this volatilitvolati. your point is well-taken. gone are the days of 50-point swings. we re skating below this level. there s 24,000, a key like logical level. the dow down more than 700 points. so in my humble opinion. the thing that is guiding us the most today are the trade tariffs. the government doesn t pay these. u.s. citizens, consumers pay
but they managed to fight it off? why did they manage to fight off these kind of techniques and not senator john kerry my co-author, his name is henry ferrell, he s a wonderful professor at georgetown, wrote a great essay about this in foreign policy magazine called american democracy is an easy target. so this is stuff we can think about, this is stuff we can fix. and, in fact, rick, how do you fix it when the senate foreign relations committee recently cataloged how the administration by denying the russian interference in the election is refusing to make the fixes necessary before the 2018 midterms. that s right. that s right. and that s a perfect example of how we re talking about an algorithm of democracy that is broken, not just computer algorithms. the craziest story if it doesn t get oxygen doesn t go anywhere. a good blogger, a friend of mine
so the republicans are going to have to kind of measure their talking points on the market. i imagine president trump will be a little bit more careful or at least his advisers will tell him to be a little bit more careful. a lot of these things are well beyond his control, especially when you re talking about computer algorithms that can make these things snowball quickly, can get ugly quick and you can see big numbers. on that, how much influence does the president have on the markets? you know, he can kind of talk up the economy. obviously whatever he does with nafta and these trade decisions can have a stock market impact. but in a lot of respects, we re seeing sustained stable growth. a lot of investors are really excited about this tax cut law and this deregulation push. but there s also a sense that that could already be baked into the stock market. the stock market might have gone up a little bit too long last year. so the question is, is now the time when we pull back a li