"He’s convinced someone’s figured out an algorithm that’s faster than anything he’s ever seen before. So fast, he fears, that it might eventually put him out of a job."*Ok, the idea that someone had programmed a bot to read tweets became something of an urban legend recently, though Reuters showed that the specific example the stories pointed to was actually from a news headline, a few seconds before the tweet. But whether it's a news headline or a tweet is hardly the point.
I'm going to make a bold prediction: no such algorithm exists. While I generally side with Alan Turing's view--the fact that humans can do something is evidence that a computer program could do the same, given sufficient resources--such an algorithm would be enough to fill several doctoral dissertations and get you a phd from any university you choose. If there was a Nobel prize in computer science, such an algorithm would win you that.
On the other hand, it would be exceptionally easy to write an algorithm that looks like one that is trading based on news headlines and tweets.
Think about it. Insider trading is illegal, which in practice means that you can't act on any insider information until that information is officially made public--otherwise, you'd get caught and prosecuted. But if you have insider information about something like the Altera-Intel deal, then it would be exceedingly easy to write a web-scrapping program that looks for published headlines and tweets about it, and automatically make the trade once the headline is found. You'd earn about the same returns as with a pure insider trade, but if anyone asks you can plausibly claim to have learned the information--or rather, your bot learned the information--from a publicly available source.
So, there's no hyper-intelligent news-wire-reading bot. Far more likely that we're witnessing a new spin on the same old insider trading game.