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Algo buy program

Massive Buying Program Hits Markets Going Into the Close

A massive buy program hit markets as algos began buying up stocks in the last hour and a half of trading. Some are calling it the fourth largest buying program of all-time and is estimated at over $21 billion.

Algo buy program kicks in before market close on December 27, 2018

This wasn’t retail traders like you and me. This was coordinating bot-buying across entire sectors which catapulted markets higher. All 11 sectors finished in positive territory.

The buy signal we are waiting for looks set to trigger tomorrow on the S&P 500 1-hour chart and the bullish cross of the 13-hour and 30-hour moving averages.

SPX 1 hour chart

This insane rally into the close was not retail stock traders deciding to do a little bargain hunting. This was a massive reallocation of billions of dollars away from cash and into stocks.

For the last two days, the program buying triggered at almost exactly 2:30 PM and continued into the close. Let’s see if we get a third day of program buying tomorrow at around 2:30 PM. My guess is that this is end-of-year positioning by institutional traders and money managers after tax selling earlier in the month.

When markets open tomorrow, the buy program will likely not be running and so we will have to rely on normal trading action to determine what happens.

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