I've been watching the market for many moons and that 100 point drop on s&P was impressive. % or not...peace
Sure markets including oil etc have been selling off for days and I expected today to be volatile and open lower. Maybe I wasn't clear in the original question but interested in what caused such a dip in the US markets near the open given that the Euro markets were pretty stable and wasnt any major news I could see linked to it. Markets go up and down but that US opening, especially the NASDAQ, just looked strange.
IMO ....... The last two trading days are classic "Black Swan" and it was out of the blue. Media coverage and ET activity before Friday: NIL, with the standard stories on the economy - are we heading for a decline, will the markets continue to rise? Blah Blah Blah. Media coverage and ET activity today: Very active, the market is dominating the news and the ET's post and new thread count has gone through the roof. ET hasn't been this busy in years.
The open on any gven day has always been mysterious to me. Just more intense today. Do traders at GS or hedge funds know the of liquidity at any price level prior to the open? Me thinks not. Can today be just a lot of market players doing the same thing very fast at the open , then adjusting very fast as well. Paulson, Bush and Geitner probably put the floor at -1000. So, i sure dont know why the intensity in the same direction was much higher In the US. In the past though , during volatility of Europe stress , 2010 and on, I recall US markets completely reversing large Eurostoxx50 gains or losses at the To run the other way.
Not a Black Swan event at all, many people have been expecting a 10-15% correction on US equities most of this year. TSX had already corrected 10% off yearly highs BEFORE US indexes had even started this correction. ET's post count merely indicates what has always been true here, the trading section is dominated by posters who are always bearish, many of whom believe in conspiracy theories and assorted bs about the US fed. This place was flooded with posters in 2009-2011 that believed US equities were in a bear market headed below 2008/2009 lows. Eventually, most figured out there was something clearly wrong with their thinking, the forecasts on here were quite comical in nature. A true Black Swan is something like the H1N1 virus or the Japanese earthquake.
Could also be better knowledge of shorting and better retail traders in general. I remember in 1999-2000-2001 as the market turned down most of the retail that I knew including myself were just sitting and watching our ameritrade screens. CNBC telling us that "stocks may never drop again in our lifetime". Took a few good drops to even realize that the dot com mania was nearing an end. Even then all we did was sell what we held. Then in 2009, even though we were trading with TOS and IB, esignal, Reuters boxes, MT4, OptionsHouse.... shorting was thought of as Un- American and even a threat to the markets well being, so we did not hone our skills at shorting until it became clear the street was front running subprime RMBS shit and distributing it into our pensions and local banks inventory. Shorting at that point became a mission ...an outright survival technique and we aimed at the subprime RMBS lenders, issuers, tranchers, raters, insurers and shorted them just like we buy apple today (learning the brokers who had the most shares to borrow, cheapest borrow cost, greeks on put options etc). Today I will trade both ways but I notice a huge perma bull-perma bear split in the retail space today and I think the experienced bears with lots of dry powder and computer/charting powder have been waiting for this day for years and years. Most missed the move from 666 back up to the recent top and they thought the whole move was orchestrated as the Fed let Lehman's, Bear and Merrill hang in the wind while Goldman and JP Morgan got a pass. They have been waiting in the wings for this and Friday the door was open wide enough to go in without a squeeze.
But in Asia, we see it as US market drops for no solid reason then Asia markets include China just follows.