in reality ..no one believes or expects there to be a crash because of your above explanation. the crowd believes everyone is too bearish therefore, being a contrarian would think "impossible to have a crash" ...however, if everyone believes it's impossible to have a crash because of all the negativity and bearishness .. than the true "contrarian" would be to expect a crash ...
ye and its just like i see that pattern countless times in stocks, just say the price is sitting on the moving averages and it is tightly wound up almost coiling up, so naturally you go long as well as many other people. Then towards the end of the day nothing is happening price still hasn't gone up so all the longs start dumping cus nothing is happening creating a mini price "crash". Same with the s+p enless lehman declares bankruptcy today i don't see us crashing, if they get bought in pieces by other banks i see us rallying a few hundred points on the dow, THEN we go down again for WM then go up then back down again for AIG then up then back down again for MER then up then back down again for GE (because they will fail by then) then up, and then my friends we can finally let the bulls back out.
crashes are a thing of the past - fully electronic exchanges has trading curbs and limits that simply won't allow a market to trade down that much (2000 DJIA downmove in a day). Sure you can easily see a minus 4 percent day, but I think the absolute maximum you could see is 7-8% to the downside in a day. And that would be US defaulting on debt (won't happen, can always print money) or nuclear attack (well... what are the odds). Look at the aftermath of 9/11, the bursting of tech, Russian financial crisis, LTCM etc. There are limits to how much the markets can move before extraordinary measures are taken. The new answer is controlled selling - which is like a normal bear market really.
Can we start a new category of threads called "I think that Stock/forex/Futures X is going to explode up/crash/go down/go up on M/T/W/R/F ??? Then, inane repetitious thread starters can be walled off...
War debts: Civil War: 1860: 64,842,287.88 1865: 2,680,647,869.74 Percent increase: 4,034% Source: <a href="http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo2.htm">Debt to the Penny History 1850-1899</a> WWII: 1940: 42,967,531,037.68 1945: 258,682,187,409.93 Percent increase: 502% Source: <a href="http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo3.htm">Debt to the Penny History 1900-1949</a> TWAT: 2001: 5,807,463,412,200.06 2007: 9,007,653,372,262.48 Percent increase: 55% Source: <a href="http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm">Debt to the Penny History 2000-2007</a> A little research before posting is in order.
10:02 ECONX Federal Reserve and other central banks announce further coordinated actions to expand significantly the capacity to provide U.S. dollar liquidity In response to continued strains in short-term funding markets, central banks today are announcing further coordinated actions to expand significantly the capacity to provide U.S. dollar liquidity. Central banks will continue to work together closely and are prepared to take appropriate steps as needed to address funding pressures. Federal Reserve Actions The Federal Reserve announced today several initiatives to support financial stability and to maintain a stable flow of credit to the economy during this period of significant strain in global markets. We will continue to adapt these liquidity facilities as necessary and will keep them in place as long as circumstances require. Actions by the Federal Reserve include: (1) an increase in the size of the 84-day maturity Term Auction Facility (TAF) auctions to $75 bln per auction from $25 bln beginning with the October 6 auction, (2) two forward TAF auctions totaling $150 bln that will be conducted in November to provide term funding over year-end, and (3) an increase in swap authorization limits with the Bank of Canada, Bank of England, Bank of Japan, Danmarks Nationalbank (National Bank of Denmark), European Central Bank (ECB), Norges Bank (Bank of Norway), Reserve Bank of Australia, Sveriges Riksbank (Bank of Sweden), and Swiss National Bank to a total of $620 bln, from $290 bln previously. These steps are being undertaken to mitigate pressures evident in the term funding markets both in the United States and abroad. By committing to provide a very large quantity of term funding, the Federal Reserve actions should reassure financial market participants that financing will be available against good collateral, lessening concerns about funding and rollover risk. 84-Day Maturity TAF Auctions The increase to $75 bln per auction will triple the supply of 84-day maturity credit to $225 bln from $75 bln. TAF credit at the 28-day maturity will remain at $75 bln. The total amount of TAF credit available in the 28-day and 84-day auction cycles will double to $300 bln from $150 bln. Forward TAF Auctions The forward TAF auctions are a new program designed to provide reassurance to market participants that term funding will be available over year-end. The timing and terms of the two forward TAF auctions will be determined after consultations with depository institutions that utilize the TAF program. It is anticipated that there will be two auctions in November totaling $150 bln. These auctions will provide short-term (one- to two-week term) TAF credit over year-end. Foreign Exchange Swap Lines The Federal Open Market Committee (FOMC) has authorized a $330 bln expansion of its temporary reciprocal currency arrangements (swap lines). This increased capacity will be available to provide funding for U.S. dollar liquidity operations by the other central banks. The FOMC has authorized increases in all of the temporary swap facilities with other central banks. These larger facilities will now support the provision of U.S. dollar liquidity in amounts of up to $30 bln by the Bank of Canada, $80 bln by the Bank of England, $120 bln by the Bank of Japan, $15 bln by Danmarks Nationalbank, $240 bln by the ECB, $15 bln by the Norges Bank, $30 bln by the Reserve Bank of Australia, $30 bln by the Sveriges Riksbank, and $60 bln by the Swiss National Bank. As a result of these actions, the total size of outstanding swap lines is $620 bln. All of the temporary reciprocal swap facilities have been authorized through April 30, 2009. Dollar funding rates abroad have been elevated relative to dollar funding rates available in the United States, reflecting a structural dollar funding shortfall outside of the United States. The increase in the amount of foreign exchange swap authorization limits will enable many central banks to increase the amount of dollar funding that they can provide in their home markets. This should help to improve the distribution of dollar liquidity around the globe.