DOW dropped 1000 pts in intraday trading Gold back over $1200

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DOW dropped 1000 pts in intraday trading Gold back over $1200

The DOW dropped almost 1000 points in an instant today before rallying to close down 347 pts.  Gold crossed back above 1200 in spite of a huge rally in the dollar.  That 600 point rally after the 1000 pt drop must have cost the central banks a pretty penny.

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Nathan Martin makes a point on Nathan's economic edge that this crash happened right after Harry Reid mad a statement that he thought the audit the fed bill would come to a vote.  He feels the 1700 point wipsaw swing was the central banks flexing their muscle at this statement.

The nastdaq has nullified trades on stocks trading more than 60 percent over or under their close during this event.

Think we have free markets?

 

edit: on fox news they are saying a trader made a "goof" and sold several billion in Proctor and Gamble stock when he meant to sell several million.  Darn those silly decimal spaces.

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Marc Faber speaks on todays big swing.

http://marcfaber.tk/

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Jim Sinclair talks about the dow drop!

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/5/6_Ji...

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...
docmims wrote:

The nastdaq has nullified trades on stocks trading more than 60 percent over or under their close during this event. 

doc -

I haven't been able to find anything on this yet.  Can you post any links that discuss nullifying trades as a result of today's sleigh ride?

Federal Register: January 29, 2003 (Volume 68, Number 19) and NASDAQ Rule 1092 "Obvious Errors and Catastrophic Errors" address obvious errors but IIRC nullification only applies to the specific trade on which the error was made.  If a trader gets smoked by fallout from an erroneous trade, Rule 11890 spells out how to address and petition for adjudication.

 

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

From Bloomberg --

Nasdaq OMX Group Inc. said it will cancel stock trades on all exchanges that were more than 60 percent above or below prices at 2:40 p.m. New York time, just as U.S. equities plummeted. Nasdaq said it will provide a list of stocks affected and the prices at which the trades will be canceled. The decision cannot be appealed, Nasdaq said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9aQCydv3ERE&pos=2

What I love is the huffing and puffing outta Washington, D.C., from the most insolvent entity on earth (negative $100 trillion net worth, approximately). KongressKlown Scaramouche bloviates --

The market rout triggered scrutiny from lawmakers. U.S. Representative Paul Kanjorski, a Pennsylvania Democrat, set a May 11 hearing. U.S. “This is unacceptable,” Kanjorski, who leads a House Financial Services subcommittee that oversees the SEC, said in a statement. “We cannot allow a technological error to spook the markets and cause panic.”

UNACCEPTABLE! Stupid markets! Off with their heads! Money mouth

 

 

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Follow-up to doc's post #1 -

Discussion of trade nullification found here

http://www.salon.com/technology/how_the_world_works/2010/05/06/stock_market_glitch_that_ate_wall_street

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Heres the link"

http://www.bloomberg.com/apps/news?pid=20601087&sid=ai9CehsZxjqA&pos=1

CNBC HEADLINE:

Dow Soars 750 off intraday low!!!

(no link. thats a joke)Smile

 

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

I just finished watching Robert Greifeld - NASDAQ OMX President and CEO - offer three different reasons for yesterday's event and was struck by the fact that he thinks it's more important to solve a problem than it is to understand it.  He kept going to "lack of liquidity on one exchange is interpreted as a negative signal on another exchange" (loosely paraphrased) - an explanation which is pretty well supported by the sequence of events in the Time and Sales Sheets from 14:30-14:56 yesterday.  He never addressed the issue of what caused the "lack of liquidity" and dismissed the likelihood of a trading error - even though in the past, trading errors can (and have) caused a huge imbalance in the Bid and Ask price for a particular stock and hence eliminated liquidity. 

So Bob, what caused the imbalance in the first place?

I was always under the impression that one needs to know what the cause of a problem before one can implement effective correction actions, but I guess that's just a belief.

Once the clip is accessible I'll get it posted for anyone who cares.

 Here is the link to CNBC's video archive - as of this post, the latest vid was hung up at 7:51 AM.  Greifeld's interview should be up soon.

http://www.cnbc.com/?id=15839263&tabid=15839798&tabheader=false&t=0.46134526009244603

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

We at the NASDAQ will, ummm, investigate the situation, and ummm, make sure that, ummmm, there are always more buyers than sellers of our wothle-while equities.  We have ummm fixed the situaltion.  Nothing to see here.  Please move along and keep inviesting.

Thank you

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

The glitch was akin to lifting up Wall Street's skirt for a minute, and we got a brief glimpse of all the hungry shorts that have already been entered into automatic trading systems, ready to eat the guts out of the market at a moments notice if things start to slide.  Meanwhile the same firms and individuals who have those massive shorts waiting in the wings go onto television to tell everyone how bullish they are and how it is the time to buy stock.  It's a fascinating time we're living in.

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...
redpill wrote:

The glitch was akin to lifting up Wall Street's skirt for a minute, and we got a brief glimpse of all the hungry shorts that have already been entered into automatic trading systems, ready to eat the guts out of the market at a moments notice if things start to slide.  Meanwhile the same firms and individuals who have those massive shorts waiting in the wings go onto television to tell everyone how bullish they are and how it is the time to buy stock.  It's a fascinating time we're living in.

Interesting theory. 

There was almost no Volume At Price after 3M slipped below $82 and PG went below $60.  T&S sheets show periodic big buys as existing shorts were covered and the free fall paused. 

I'm still waiting for an explanation of the $11-$12 disconnect in 3M between the THRD and NMS exchanges over a 6 second span - the fact that the majority of the Buys on the NMS were at $84.24 and the Sells on the THRD were at $ 73.25 just doesn't make any sense.

Chris asked the question earlier that I think is at the root of the problem - "Where did the Bids go?"

It's not very reassuring that with each new "explanation" more and more questions come up.

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Dupe

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Triple post.

Gaaaaaahhh - the same computers responsible for yesterday's glitch have taken control of my posting.

I was there the day they turned SKYNET on.......

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

I think it probably was either glitch or sabotage that caused the initial movements, what I found more interesting is how ready the bulk of institutional investors were to short the market to hell on a moment's notice with massive automatic trading stops/shorts engaged, long before any individual investor would have a prayer of getting a trade through.  Lest people think they are equal footing with the big traders, what happened Thursday should make it crystal clear that they are not.  If/when the SHTF on the market again, expect the insiders to be long gone before anyone else has a prayer of trying to get their money out before things fall to pieces.  Not only will they get out first, but they'll be broadly shorting it also to make more money, knowing all the little guys will try to sell on the way down; they have no qualms about bleeding small investors for every penny they can as a result of their infrastructure.  Their computers are much closer to the exchange than anyone else's.  Sounds silly, but physical distance from the exchange commands a massive premium, and events like Thursday are precisely why the big boys pay a ton of money to make sure their trades go through before anyone else's.

It's a good thing to keep in mind that at the end of the day, the stock market is their sandbox, and you can be lulled into complacency day after day when everyone seemingly plays nice.  But at a moments notice they will bury you.  Whatever you have in there, don't expect to be able to get it out at the drop of a hat when things get ugly.

It's little wonder that physical gold is becoming ever more attractive for individuals looking to protect their personal wealth.  From bailouts and bonuses to stock market shenanigans like we saw on Thursday, having something physical that has a long history of value can seem like a much more comfortable store of wealth than being subject to the whims of the ruthless.

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Yes. There are some serious underlying problems.  Without serious relaxed accounting rules(read fraudulent accounting temporarily allowed by the govt.) the current PE (price to earnings ratio) would be the hightest in history if corporate assets were marked to market reallity.

It will be interesting to see if they can whistle past this graveyard this week

Nice insights in this article

.http://economicedge.blogspot.com/2010/05/may-monetary-trends.html

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...
redpill wrote:

I think it probably was either glitch or sabotage that caused the initial movements, what I found more interesting is how ready the bulk of institutional investors were to short the market to hell on a moment's notice with massive automatic trading stops/shorts engaged, long before any individual investor would have a prayer of getting a trade through.  Lest people think they are equal footing with the big traders, what happened Thursday should make it crystal clear that they are not.  If/when the SHTF on the market again, expect the insiders to be long gone before anyone else has a prayer of trying to get their money out before things fall to pieces.  Not only will they get out first, but they'll be broadly shorting it also to make more money, knowing all the little guys will try to sell on the way down; they have no qualms about bleeding small investors for every penny they can as a result of their infrastructure.  Their computers are much closer to the exchange than anyone else's.  Sounds silly, but physical distance from the exchange commands a massive premium, and events like Thursday are precisely why the big boys pay a ton of money to make sure their trades go through before anyone else's.

It's a good thing to keep in mind that at the end of the day, the stock market is their sandbox, and you can be lulled into complacency day after day when everyone seemingly plays nice.  But at a moments notice they will bury you.  Whatever you have in there, don't expect to be able to get it out at the drop of a hat when things get ugly.

It's little wonder that physical gold is becoming ever more attractive for individuals looking to protect their personal wealth.  From bailouts and bonuses to stock market shenanigans like we saw on Thursday, having something physical that has a long history of value can seem like a much more comfortable store of wealth than being subject to the whims of the ruthless.

I disagree with just about everything you wrote redpill.  Except for your observations on the worth of holding gold.

I made two trades at 2:50 - both profitable.

From a laptop using an air card.

Build your own rule set that will allow you to trade in "their sandbox" and it doesn't matter who else is there. 

The most important thing to do is develop market neutrality.  If the market goes up day, great.  If it goes down day, also great.

Just don't go sideways.

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Dow Futures up 179... what gives??  

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Bearishness is such a drag, such a downer - what's wrong with a little levity - for it's own sake if you can't find a more substantial reason?

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...
Dogs_In_A_Pile wrote:

I disagree with just about everything you wrote redpill.  Except for your observations on the worth of holding gold.

I made two trades at 2:50 - both profitable.

From a laptop using an air card.

I hit all green lights on the way to work the other day too.  But I wouldn't bet my ass on it happening again tomorrow.

Dogs_In_A_Pile wrote:

Build your own rule set that will allow you to trade in "their sandbox" and it doesn't matter who else is there.

No thanks, there are much nicer sandboxes around.  Watch your back out there Wink

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Markets are going bananas in Europe with CAC up 7%, dow futures up 335.

I said it on friday that the ECB would cave and push the nuclear button. After the past 2 years what else would anyone expect?? As Marc Faber said, in a democracy the path of easiest resistance is money printing, and they will continue to print.

Some guy on CNBC (euro version) said that with all this money printing gold will go to $7000 per oz. Awesome

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

I seem to remember someone around these parts saying something about how the authorities will do whatever is necessary to maintain the status quo.  Must have been a wise chap.

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Re: DOW dropped 1000 pts in intraday trading Gold back over ...

Well dow is up 400 today, almost all with a short initial burst, and a loan of almost a Trillion to the Greeks.  We'll see how long this kicks the can down the road.

 

Remember, if you are going to panic.  Panic first!

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