It will come to the point when investors will not want to go near the market. Posts on the general thread have alluded to it but the exchanges are open to the next terrorist attack.
If it was a normal correction the bounce would not have been so swift and opportunistic.
Perhaps this is an extreme theory but the exchanges should look at this as a warning. I hope a full investigation takes place and the ASX/ASIC/Oz Government takes note.
It is not only the trigger that's the worry; it is the domino effect across the market. It happened so quickly the algorithms went into overdrive triggering stop losses.
Retail traders would have been chased down to the bottom of the heap by the bots jumping the queue. The bots would then have won the race in the buying spree that followed on the way up.
It will be interesting to see if banks have programmes in place to link margin calls into such an event, adding to the chaos.
Some controlling element must be put in place to avoid the insurgence of unfair trading practices taking advantage of potential glitches. New algorithms will be written to jump in at ridiculously low prices when stocks go from $40 to 1 cent for no reason.
The original mistake, whether intentional or not, may be looked at but the ensuing mayhem cannot be reversed.
