Maybe a silly question: Is it possible A.I. is propping up the stock market?

[Rustynaerduwell]

A.I. is used extensively in the buying and selling of stocks. That's about all I know. Can it be using algorithms to keep the whole thing always going up?

[ck4829]

1. No, because AI would be more rational. It'd be better if the stock market WAS run by AI

[Loki Liesmith]

2. I build AI for a living

I don’t know what an AI could do to effect this.

[uponit7771]

3. Not AI but triggers and alerts can set off trading directions. Right now the overnight jumps aren't

... natural that's a known known ... not 10 of them.

Those huge overnight jump ups bypass some of the triggers to a certain degree because no one knows what's going to happen the next day really.

[Hoyt]

4. Suppose it's possible. But I bet large, successful investors using algorithms were

quick to step in and modify the models for the unusual circumstances.

I believe the market is overvalued in circumstances, but no one knows for sure.

[Girard442]

5. I think it's more likely there's a pact between the Fed and investors.

The Fed will do whatever it takes to keep the market from tanking, up to and including dropping million-dollar bills from helicopters. Investors know that.

[JustGene]

8. Yeah

The Feds part of the stimulus is not very well publicised, and I believe it is more than the package.
Much of this is showing up in the market, indirectly.

[fescuerescue]

6. AI doesn't have money

AI just works for people who do.

So yea. AI has been working in the stock market for awhile now.

But that doesn't prop it up. Because while the AI's are on the buy and sell side....someone (with money) has to be on other side.

[hunter]

7. See my post here...

https://www.democraticunderground.com/100213564819#post25

[unblock]

9. ai is primarily used for fairly or very short-term explotation of inefficiencies

they detect patterns that have been tested to lead to, on average, a predictable move (up or down, as long is it's predictable). that causes a signal to open a trade. when they then detect and adverse pattern or at least that there's a better pattern elsewhere, that triggers a signal to close the trade.

the positions involved can be open for a fraction of a second or a few days, depending on the strategy, but they're rarely long-term

as a result, the can cause churn and wild swings sometimes, but rather unlikely to cause any kind of long-term shift up or down.

[erronis]

10. AI is used to push the human investors out of the transactions. Any real person that

doesn't have some special knowledge about some commodity/equity is going to get clobbered by the near-instantaneous trades/test-trades that can be done by automated systems.

For now, all major trading firms are in competition with each other to score the best results on their micro-second transactions - all using AI (or whatever we want to call it.)

If the major trading firms decide to collude on how they treat certain triggers then it is possible they could manipulate the markets. If they were colluding the regulatory agencies (SEC, NASDAQ, etc.) might not know. And who knows how "regulatory" these self-proclaimed regulators are....

[I_UndergroundPanther]

11. I don't doubt it.

They'd never confess if it is true.

[PoliticAverse]

12. The ability to create money by keystroke is propping up the stock market. n/t

[Shermann]

13. Looks like a game of chicken to me

With many many chickens. They know the w-shape is coming but want to pump and dump and leave the next guy holding the bag.

Cluck cluck.