Monday/ robo-advisors and robo-traders

Well – it was a bit of a bloodbath today in the stock market with the Dow Jones down another 4.6%.   Note to media: Why sensationalize it further by reporting the 1,175 points loss as the ‘biggest ever’ – technically true, but misleading? Percentage-wise it’s only the biggest drop since 2011 for the Dow.

Bloomberg reports that the robo-advisor websites from Betterment and Wealthfront crashed today. (Too much traffic).  Ironically, robo-trading algorithms are suspected as the culprits for accelerating the 900 point loss to 1,600 points (6.2%*) in the afternoon, before the market recovered somewhat to the 1,175 points loss at the close.

*At 7% down for the S&P 500, the trading curb circuit-breakers would have halted trading for 15 minutes.

Hmm .. futures point to 2% more downside on the Dow Jones’s Tuesday opening (this as of 10 pm Eastern Time on Monday night).

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