Still wondering why the market has such bizarre action? Why the Mom-and-Pop investor wants little to do with it? Wondering if fear of Flash Crash II runs high? Look no further, High Frequency Trading (HFT) has been indicted in full.

The blog Zero Hedge, one of the most cutting-edge and informative places to get inside knowledge on how the market works, has been pointing to anslysis from Nanex, a market data provider, on how HFT is corrupting markets and trigger May's "Flash Crash." It paints an incredibly disturbing picture of a dysfunctional market rigged by crooked robots.

I won't reprise the entire analysis -- you can wade through the orginal posting on Nanex discoveries yourself, and it's worth a look if only to see the fascinating and bizarre charts.  But I can summarize it: The markets have run amok with diabolical "quote stuffing" programs that try to mine holes in the market system and  fool other computers and markets into coughing up stock quotes at absurd prices.

Time to write up the morning market wrap, before I fall asleep. Kind of a snoozer. Markets are enjoying a small relief rally this morning as no new disastrous news emerged overnight. Data was relatively benign.

The ADP jobs number came out weak, but market digested that. We all know the jobs situation sucks. None of the European banks blew up overnight, and the CDS spreads (an indication of risk) stabilized after hitting new highs yesterday. Euro banks also apparently borrowed less from the ECB than believed, which we are supposed to take as good news.

What to expect going forward? I say, watch the bond market. The fact that bonds hit record highs yesterday, sending the 10-year yield down below 3%, is a big warning sign. This is the trade that has caught everybody -- even the biggest smarty-pants hedge funds -- flat-footed. Yields were supposed to go up, remember? Apparently a lot of hedge funds are being trashed on "yield-steepener" trades (that is a bet that short-term rates do not go up as fast as long-term rates -- i.e. the spread widens), or so says Zero Hedge.

The fact that the yield curve is flattening is surprising a lot of people and does not transmit a good signal about the economy.

In the meantime, it does not look like anything big will happen today. Grab a sandwich, call your mortgage broker about refinancing your mortage at 4.50%, and check back on the market with 60 minutes to go, when all the wild stuff usually happens anyway.

Some really good data has been published over at Zero Hedge aggregating the latest hedge fund data. The data, which comes from a variety of sources including Goldman Sachs, Compustat, and FactSet Rearch, indicates that hedge funds were collectively dumping tech stocks in favor of industrials in Q4 2009. This is an interesting development. Given that tech was the hedge fund flavor of 2009, maybe this indicates that the largest industrials may be their favor of 2010? It could also just be indicative of profit-taking on tech in Q4 into year-end. Some of the most heavily sold stocks included National Semiconductor (NYSE: NSM), Fidelity National (NYSE: FIS), eBay (Nasdaq: EBAY), and F5 Networks (Nasdaq: FFIV). Some of the most heavily bought stocks included Stanley Works (NYSE: SWK), A123 Systems (Nasdaq: AONE), and FedEx Corp. (NYSE: FDX). Nice graph of the major trend developments here. Of course, that is just the tip of the iceberg. The data is comprehensive. Take a look.