Market's Mysterious Sawtooth Pattern: Why?

Sabine Scheckel | Stone | Getty Images

The mysterious sawtooth pattern: what is going on? Take a look at the intraday charts of McDonalds, IBM and Coke. There is a sawtooth pattern: the stocks spike up on the hour, exactly on the hour, rise going into the half hour, then sell off, bottoming just before the top of the hour.

Then buying resumes exactly at the top of the hour...again. And again. And again.

This has only happened today — it is not a pattern in prior days. Apple also exhibits similar characteristics. The rest of the market does not. Hmm.

It sure looks like a program, that I agree. But what type? Maybe a portfolio rebalance that says buy on the hour, then exhausts its liquidity at the end of the half hour?

Volume is a bit higher in KO and MCD, but not dramatically. IBM has twice normal volume, not surprising given the earnings.

I know, it’s easy to scream, "It’s the Machines, Bob, it's the Machines! They're taking over!" But I do try to look for a more elegant explanation. Sorry. I'll get back to you.

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