Why are there flash crashes in the stock market but no flash rallies?

Discussion in 'Trading' started by helpme_please, Mar 3, 2018.

  1. Xela

    Xela


    This.

    (And perhaps more specifically, in this context: fear is more widely and more quickly self-reinforcing, self-perpetuating and self-compounding, at a "societal-trading level" than greed is.)
     
    #11     Mar 4, 2018
    dealmaker likes this.
  2. mbondy

    mbondy

    ^ That may be but crashes happen because of the absence of liquidity.

    Speculative bubbles, or blow-off tops, is as close as the market gets to a 'flash rally'.
     
    #12     Mar 4, 2018
    tommcginnis likes this.
  3. jinxu

    jinxu

    There are flash rallies...we call them bubbles.
     
    #13     Mar 4, 2018
    MoreLeverage and tommcginnis like this.
  4. jinxu

    jinxu

    Don't traders who are shorts have fear too? What is a short squeeze then? Is a bear not afraid?
     
    #14     Mar 4, 2018
    tommcginnis likes this.
  5. userque

    userque

    Notwithstanding the facts you omit:

    There are more 'longs' than 'shorts' in the market.

    When the longs panic sell, the move is 'stronger' than when the shorts panic buy.
     
    #15     Mar 4, 2018
  6. tommcginnis

    tommcginnis


    ^^^^^^
    This.
     
    #16     Mar 4, 2018
    userque likes this.
  7. Flash rally? Hmm

    DRYS moved 1500% in days.

    Dryships-stock.png
     
    #17     Mar 4, 2018
  8. Xela

    Xela


    Typically they move at a very different rate from that of "flash crashes", though, I think?



    Not in the same way, to the same extent, or at the same rate as traders who are long, no; and maybe there aren't as many of them, either. (I may be saying the same thing as Userque, above, just in slightly different words, though, so I'll stop there.)
     
    #18     Mar 4, 2018
    userque likes this.
  9. Maverick74

    Maverick74

    You clearly don't trade commodities. LOL.
     
    #19     Mar 4, 2018
    Sig, dealmaker and KevinD like this.
  10. snowman80

    snowman80

    I think generally ‘potential energy’ of the market is far greater to the downside simply because the value of speculative capital positioned to the long side is many times that of what is short or ‘sitting on the sidelines’ ready to be deployed.

    OP is specifically talking about the broad stock market. Individual names or commodities are obviously different animals, so to speak.
     
    #20     Mar 4, 2018