iggybacking is an efficient way to align trading strategies with these relentless computer programs. After identifying their signature early in the session; sell all the rallies or buy all the dips, as the case may be. Assume no reversal will take place that day, as long as advance-decline number stays on the far side of plus or minus 1200 on both exchanges. I know what you're thinking. But in reality, these algorithms are easy for most traders to see in action. In fact, I'm amazed that folks still ask me to explain what they look like because their intraday footprint is so heavy that it literally makes the forest shake. In any case, here's a down-and-dirty method to identify active computer programs. Start with a quote screen that includes the index futures (or related ETFs) and a selection of liquid equities across a wide variety of sectors. Add in bid, ask, last price, and price change. Color-code the numbers so the downticks are red and the upticks are greens. Then sit back and watch the first 90 minutes of the new trading day. You'll quickly notice buying and selling waves passing through the majority of instruments. These can be extremely rapid pulses, lasting a few seconds, or stomach churning air pockets that persist for minutes. The main thing that will catch your eye (and drive you crazy) will be lockstep price action between dissimilar stocks and sectors. Exchange-traded funds are primarily responsible for this eye-popping alignment. Through these liquid instruments, algorithms buy or sell huge baskets of equities in microsecond bursts. The light-speed activity then forces the stocks to get bought or sold. Add in a half-dozen cross-markets, and you have a typical program strategy. Previous « 1 2 3 » Next Have you noticed how market depth information, commonly referred to as the Level II screen, has turned into a blur of rapid pricing in the last year, making it nearly useless for analysis of short-term supply and demand? The culprit is SEC Regulation NMS, also known as the trade-through rule, which went into effect on March 5, 2007.