Beware the potential for another flash crash after earnings. Although investors today were very positive about the earnings and announced stock buy-back, those pesky super-computer programmed trades could sneak in another flash crash; deciding that those earnings, especially the core interest-generated earnings weren't so wonderful. after all, interest-generated earnings is the business that AGNC is in ... its reason for being.
So buy cautiously, saving some reserve for another day. Can't go all-in this time.
I think you're confused. HFTs buy and sell instantaneously, meaning they don't hold. They buy at $0.00 and sell at $0.01, or short in vise versa. HFTs add liquidity to the market, to an extent. It is when they stop that chaos erupts. When the market is illiquid and wants to sell is when the market crashes.
That is the whole argument against HFTs. Some say they fill the role of the Specialist, or MM, but when they are needed they are absent.
So the whole premise of your post is false. If the market is positive, and the HFTs can keep up with it, then there is no need for fear. mREITs were very liquid today. If you watched level 2 you would see that mREITs, atleast for AGNC and NLY the two I am watching, are fine for now.
Look again, oh sayer of the sooth. When one computer can drop 1 million+ shares in a sell order on a stock like AGNC, that sucks up many, many buy orders going waaaaaaay down the order chain. THAT's what causes the flash crashes. Those computer programmed trades can come from mutual funds, a single large investor, a hedge fund, an insurance company, just about anywhere where there is more than a million+ AGNC shares. It's not JUST HFT's; anyone with a massive programmed computer system that operates in the 100 nanosecond range AND holds more than a million AGNC shares in its portfolio can cause it. It's what has added volatility to the market in the last decade.
Indeed, some computers are programmed to trade on razor thin margins many times a day. Others are programmed to buy quality stocks and hold them for 90 days or more, but sell in an instant when the computer picks up the right signals. THAT'S the bigger picture, not just you're small slice.
They may bring liquidity but new rules need to be added such as the buy or sell orders needs to stand for 2 seconds, not microseconds or milliseconds as is the case today. When they can "look ahead" and then pull down their bids in miillisecond they have no place in todays market if we want to even the playing field.