Discussion in 'Trading' started by Billy Valentine, Apr 3, 2008.
The day legends were made. Any old-time SOESer's here remember?
How does this relate to present day?
?........??........!......the Dow was down ~700 points, the S&P was down ~100 handles and the Nasdaq was down ~400 points before being unchanged an hour later.......do you mean "that" day? It was a huge money-maker!
That was a wild RIDE!!!!!!!!!!! God damn bloated tech CRAP! I miss the wild Naz days!
The stock market gave investors a good scare today as the Nasdaq fell over 570 points and the Dow shed 504 by early afternoon. Fortunately, the markets bounced back as the over price tech stocks began to look like bargains. Apple's stock provided investors with an opportunity to get in at 116 3/4 at one point!
Today was the wildest ride on Wall Street since October of 1987.
Margin calls, up for example by 50% in the last week at Ameritrade, are said to be fueling the down fall of the tech stocks. Margin calls occur when highly leveraged traders are told by their brokers that due to a drop in the price of the equity the trader is holding more money will be required to maintain the loans the trader has outstanding. In such cases, unlucky traders will be forced to sell at a loss to cover those loans within 3 days of the call from their broker. Today was the big day for many of these poor souls.
While calling in loans causes a positive feedback loop in the market's collapse, it ultimately is a cleansing force, ridding the market of many over leveraged and none-too-bright players.
As Ralph Boch of the Raymond James Co. pointed out on CNBC, today we saw the type climatic market activity that signals the bottoming out of a down turn, sometimes called "capitulation." This is NOT the way that bear markets began. Although a rally from here is to be expected, Mr. Boch believes that to complete the bottoming out process, the lows set today will be tested again in the following weeks before the Nasdaq or Dow can move to new highs.
The important thing to remember is that absolutely no fundamental change in the economy or the earnings outlook for technology stocks drove the recent downdraft. Instead, this tough week is a natural result of the highly over bought, over leveraged, momentum charged atmosphere that the Nasdaq's climb to the stars engendered among investors.
Apple lost 6 dollars or 4.5%, to close at 127 5/16 on volume of 5.9 million shares.
The Nasdaq lost 75 points (1.77%) to close at 4148 on record volume of 2.87 billion shares traded. At today's low point the Nasdaq was down 13%, declining stocks outpaced advancing by 3 to 1. The 637 point trading range was also a new record. Expect some bounce back tomorrow. Note that the Nasdaq has now given back 50% of its relative gain to the Dow (Dow/Nasdaq ratio).
The Dow fell 47 points to close at 11175 on record volume of 1.5 billion shares.
The S&P 500 lost 11 points to close at 1494.
In Apple related businesses: Akamai lost 3 17/32 to close at 115 15/32. ARM Holding gained 41 dollars to close at 180. Adobe lost 3 13/16 to close at 101 3/4 dollars. Earthlink lost a dollar to close at 17 1/2. Macromedia lost 9 3/8 to 71 1/8. Motorola shed 4 1/4 to close at 134 dollars. IBM lost 7/8 to 121 1/8.
Apple's competitors: Hewlett Packard gained 5 1/4 to close at 137 13/16. Dell gained 15/16 to close at 54 5/16. Intel gained 2 1/8 to close at 132 3/4. Gateway ended down 1 7/16 at 54 1/16. Compaq was down 1/16 at 27 7/16. Shares of Microsoft slipped 2 5/16 to 88 9/16.
The bellwether 30-year US Treasury bond soared 2 8/32 to 108 7/32. The yield, which moves inversely to the price, fell to 5.67%.
For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. We also have many of these same quotes reported live (20 minute delay) on our home page. For other stories regarding Apple's stock activity, visit our Apple Stock Watch Special Report.
I recall I had 4 or 5 tech stocks in my portfolio at the time. Two of my stops were hit, and I was ticked to see I had sold at the lows and the stocks I was stopped out of closed practically unchanged. However, I accepted that the market might be trying to tell me something, and I kept the funds in cash for the stocks I was stopped out of. And a few months later I felt a lot better when these stocks were well below where I had sold.
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