I would like to see how many of you were trading when the last circuit breakers were hit and how many think we will see it in 07? It has been quiet and orderly the last few years. Why is that? No terrorist attacks? No major currency meltdowns, no major economic surprises or just orderly markets? With recent low volotility could we be on our way to wild swings? Come on all you vixers, what's up? Input please......
market designed to be flat by the volatility crushing geniuses.....5 cent rule.....pennies.......the world is running screaming from US markets.....NYSE is equivalent of AMEX circa 1988.....its obsolete.
I remember making money all day in 94 on mexican stocks after the meltdown at the .50 spread, best day was +$10,000. Then came .25's then .125, now .001..... You are right....
Agreed. US equities will be ruined once pennies become widespread. Already looking to move to Europe or Australia to trade equity derivatives.
If you have never seen the es jumping around by 1 or 2 handles, you are in for a real treat next time it happens.....
I look forward to it. Everyday should be like FOMC day! Good trading to you all (and a Happy New year!) - Spydertrader
You pose an interesting question. I have traded through volatile markets in my day. A lot of the volatility that I have seen in the markets could be credited to the market's attempt to squeeze out speculation. Most of the speculation lately has been in markets other than equity markets, such as real estate and commodities.
The same conditions exist today that existed in 1987. The economy seemed very strong and it appeared that we just avoided a big recession. The market seemed very strong and the sentiment was very bullish. Then it happened...Hong Kong was wiped out and then it started from there with every other world market. To this day, no one knows exactly what caused it. While there are many theories surrounding this mysterious selloff, its a no-brainer for me. When you combine higher interest rates, high usage of margin and overvaluation, you get an unpredictable correction, panic or even crash. I believe the above combination has been responsible for every correction, panic and crash in the stock markets history. The stock market picks up and the economy goes along with it. The fed increases the interest rates to slow the economy. Unfortunately bullish investors are maxing out on the margin. At some point there is a terrific correction. The magic number for the TXN is 5. Once it hits that in 2007, then I think we will see a correction happen. Time will tell if its a crash or panic.
good post..... agree with the high usage of margin, nearly every international market closed at new highs at the end of 2006. Shanghai did the best up over 90%. Last day of trading it was up over 3%. These markets will eventually pullback when and how much is anyones guess.