May 23, 2010
I applaud your efforts as discribed but strongly urge you to get the participation of an least one expert in "Control Engineering."
It's a relatively trivial exercise for "Large Traders" to induce either price "oscillation" or "limit bounds" for any given group of securities. All that's required is sufficient "forcing" volume and reasonable estimates of exchange sensitivity/gain and associated phase lags or temporal delays.
Induced oscillation, as only one example, could be used to induce and profit upon regular price oscillation -- in both directions.
The current "system" that the "stock market" has evolved to is now heir to ALL of the lags, droops, oscillations overshoots, undershoots (and associated cures) that are will known in the controls industry. I don't recommend that the SEC rediscover them -- one at a time. The Flash-crash was the tip of a very large iceberg.