if the "top" for yrs to come was made a week ago then how much of a "dead cat bounce" can there be and from what levels might it occur ? perhaps the first clue will be overnight and in trading monday to see if the lows of late last week hold ? if the whole world was short volatility and yen a week ago then what percent of the world has covered this bet ? :eek:
computers were blamed for the crash, but not in the manner they spun it off as. Computers have been programmed to trade the markets, using some of the best methods that money can buy. What the computers do, they scan the market for market characteristics, and the market trends around a periodic oscillation. What happened is all the computers periodic oscillation deviated from the norm, and sell orders were sent faster then anyone could anticipate. Thus, the computers will sell into you. And it can only be called off when the computers are taken off line. The risk is extremely high similar to march 2000 that people lag in pulling the exit button. But the computers will be ahead of them ultimately forcing hedge funds/retail to liquidate positions.
Bounce or dead cat bounce, US market fate will be tied to Asian and European markets and many have had bubble like runs. If contagion doesn't overspread ex-US we've got a fighting chance imo and may even hold 9K level on chart below which is my wishful case. But more likely, I think is something that looks like last May. http://finance.yahoo.com/q/bc?s=^NYA&t=2y&l=on&z=m&q=l&c= I'll be watching the opens tonight also Seth. I'll also be on the lookout for any word that fund(s) somewhere are in trouble.
hi geo ... I just read a comment from linda raschke ( of LBR group )that there is a good chance we would see serious selling if we ever got back up to 1418 in cash sp500 and that this was the high for the yr ... any idea how she has been in making predictions over the yrs in the markets ?
they are getting hit on the carry plus the derivative being invested in. Commodities in general are being hit. A double whammy. China has been known to manipulate commodity prices on a grander scale then people realize. This could all be so that China, can decrease the cost of inputs in its product cycle. Oil is doomed to fall.
...................Also the GOLD sell off was hedge funds getting cash for margin calls on stocks......... Who told you this? Did you call up all the hedge funds in Greenwich? Engage in a little independent thought. This "line" was repeated over and over again during the week. It's amazing how people will actually repeat what they hear on CNBC or whatever other news source they listen to. There's a lot of parrotting going on.
Gold sell off was a info from Standard and Poors CEO. Hedge Funds are not hedge, they are loaded with margin
Correlation risk is really bad. Tuesday should have been scary to most people. There is nowhere to hide and no one knows who is going to have to liquidate what in order to meet a margin call. I'm not sure that even the bond market is safe. Maybe the shorter end, but the long end of the curve?
the bond market is behaving as if someone is selling into it. The price is just moving sideways. But care must be warranted, this happened also in 95'96 when the prices popped up 5 or more handles. I was on the floor at CBOT when it happened, it caught everyone offguard. A trader I know ended up losing pretty much everything. Even with years in the market, a lapse in psychology can lead to devastation.
=================== Spec07; Tthanks for comment, another trader mentioned his broker said lots of margin calls, blowups tuesday [Derivatives traders nicknamed for years, tuesday= turnaround tuesday] Actually have blown up an account in years past; it takes more than a ''lapse in psychology to ''lose pretty much everything''.Hopefully he had more than 1 account;money management/diversification. Think , but not predict, bear market started tuesday[50dma sell]; even though Dow theory rightly teaches //more than a few months to change the main trend, which is still up, specifically 200dma ,up..