The super fast high tech traders.

It is the hot new thing on Wall Street, a way for a handful of traders to master the stock market, peek at investors’ orders and, critics say, even subtly manipulate share prices.
It is called high-frequency trading — and it is suddenly one of the most talked-about and mysterious forces in the markets.
Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else’s expense.
These systems are so fast they can outsmart or outrun other investors, humans and computers alike. And after growing in the shadows for years, they are generating lots of talk.
Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed. High-frequency trading is one answer.
And when a former Goldman Sachs programmer was accused of stealing secret computer codes — software that a federal prosecutor said could “manipulate markets in unfair ways” — it only added to the mystery. Goldman acknowledges that it profits from high-frequency trading, but disputes that it has an unfair advantage.
Yet high-frequency specialists clearly have an edge over typical traders, let alone ordinary investors.If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage.
Powerful algorithms — “algos,” in industry parlance — execute millions of orders a second and scan dozens of public and private marketplaces simultaneously. They can spot trends before other investors can blink, changing orders and strategies within milliseconds.
High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there.
It’s become a technological arms race, and what separates winners and losers is how fast they can move.Markets need liquidity, and high-frequency traders provide opportunities for other investors to buy and sell.
While markets are supposed to ensure transparency by showing orders to everyone simultaneously, a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee.
Tracking the Dow,Monday 17/05/10.(4 market days to index/options expiry)

9:30am:--The Empire State Manufacturing Survey fell to 19.1 in May from 31.9 in April to record its worst reading since January.A shooting star opener.

10:30am:--Bearish candlestick coupled with hangman.

11:30am:--A new session low,another hangman. The financial sector fallen under a sudden bout of selling pressure.

12:30noon:--A technical rebound,but was flat .

1:30pm:--Attempt to retrace to MAV resistance line fall short.

2:30pm:--Commodities came under sharp pressure this session.A second attempt to break the MAV reistance.Bullish.

3:30pm:--Resistance penetrated and now pullback to MAV support.An indecision doji followed by the bulls.

4:00pm:--A weak bullish closing.

A bullish dragonfly candlestick formation after completing the pullback of the whole body of 6th of May candlestick.The long lower shadow was utilised a quarter part of it failing to reach the pivot of 10,336.99 points.

The 3rd day before index expiry will see more aggressive short covering of rollover contracts.