The last time Matt Rothman did a holistic analysis of the market two months ago, he observed market dispersion which was at October 1987 levels: investors were buying anything and everything indiscriminately. In his latest Quantitiative Strategies observations, Rothman is noticing a slight return to normalcy as finally there is a slight discrimination between various asset classes. Whether this will persist, now that potential program trading disruptive elements may have been removed (even if temporarily) or whether the return of the 3:30pm SPY/ES microblock buying sprees will result in this fledgling flight to fundamentals being aborted, only the next few weeks will demonstrate.

Summary observations of today's key events.

Still out in the boonies, so a few more days without extended analysis. In the meantime, some more amusement on GoldmanGate: Cryptogon has created a piece of html code that Google queries latch on to when searching for "Goldman Sachs Code Torrent", allowing the sysadmin to track which IPs and firms are querrying this keyword. Interesting results.

The full Aleynikov transcript.

GATA today urged the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission to investigate the Goldman Sachs Group Inc. computer trading program that, according to a federal prosecutor, the bank acknowledges can be used to manipulate markets.

"Despite massive state interventions in economies around the
world, many corporate leaders and investors act as though
globalization remains the dominant paradigm. That is a mistake."

Some perspectives on why everyone should take out their credit card (preferably one issued by General Electric), dial 1-900-PIMCO and buy as many treasuries as their credit rating will allow them. Also, fast forward to 4:20 for some candid observations on puppeteering regarding PIMCO's most recent personnel addition. Odd that CNBC should be asking such questions.

The NYSE has officially released the correction for its lapse in reporting Goldman Sachs' program trading numbers last week.

Short Answer: It depends, but it could get ugly.

Some recommended afterthoughts from Dave and Matt.

Joe Saluzzi submits: We have talked extensively on our blog and in our white papers about the power of high frequency trading and program trading. We have noted that these trading strategies can move the market quickly during the trading day. We have always suspected that there have been certain major players that can dominate this space. Now comes the case of the stolen proprietary trading code from Goldman Sachs.

"We have had 6 points of multiple expansion. It has been a multiple expansion rally... We have priced in a 2012 recovery."
CNBC can't get enough of corny jokes about crystal balls. Zero Hedge can't get enough of David's delightful grasp on economics.

• British manufacturing output dropped in May
• Home prices may fall in more than half of the largest U.S. cities through of 2011
• Justice Dept. to look at telecoms and abuse of their market power.
• Oil hovers above $64 after plunging over past week
• Plane insurers suffer worst month since 2001 on Air France and Yemeni crashes
• US Service economy contracts at slowest pace in nine months in ISM index.

Just when one thought it is possible to have a big scandal erupt, in which Chicago is named and not have Ken Griffin involved, the Citadel trail emerges. Contrary to previous rumors that Getco may have been the unfortunate firm to land Bond, Serge Bond, Misha Malyshev's new outfit, Teza Technologies, emerges with a bang. Teza, run by Misha, whom Zero Hedge has discussed previously, former Head of High-Frequency Trading at Citadel, together with another former teammate and recent Princeton grad (resume recently pulled from the interwebs), Jace Kohlmeier, announced that it had suspended Sergey without pay after learning of the allegations

“The
bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said. “The copy in Germany is still out there, and we at this time do not know who else has access to it.”

The prosecutor added, “Once it is out there, anybody will be able to use this, and their market share will be adversely affected.”

The proprietary code lets the firm do “sophisticated,
high-speed and high-volume trades on various stock and commodities
markets,” prosecutors said in court papers. The trades generate “many
millions of dollars” each year.