Weird Algo

Last night, someone's trading system reversed the buy/sell signals in the natural gas market in a play to either a) trigger a shedload of limit orders in the market, b) generate increased volatility and/or c) screw with people's heads.

Zero Hedge's Tyler Durden has three articles up on this:

Yesterday, just after 8 pm Eastern we presented a very curious move in NatGas trading on the NYMEX when under very light volume, the NG performed something akin to a sine wave expansion, with about 12 peaks and troughs with ever increasing amplitude, until ultimately it triggered a major sell off when it appeared to touch off an avalanche of limit orders about 3% from the prevailing price, leading to an almost instantaneous 8% drop in Natgas which was promptly recovered. We dubbed this a fractal pattern, and after a follow up with the trade forensics experts at Nanex, it appears this was a very spot on designation, as zooming into the pattern indicates increasing levels of self-similarity and complexity. Yet aesthetic observations aside, this latest algo appears to be nothing more than a limit order-busting market manipulation device, whose sole purpose is to destabilize and generate volatility for the creator of the algo.

Take a look at the market graphs in the linked article(s). There are some weird people programming these things. That or we're seeing rogue AI's, and Skynet really did go live.