for the archive about this day, when low strangeness came a calling.
Naz HI 2407.79 LO 2185.75 Cl 2319.64
Vix Close 32.70 up 7.89
S&P Hi 1167.58 LO 1065.79 Cl 1128.91
Rut HI 700.89 LO 637.69 Cl 675.18
be interesting what the duration in time minutes from LO to 1st touch of what would be close.
2 Posts from Ahha, 2nd post first, 1st at link
From: ahhaha 5/6/2010 4:41:42 PM
of 16847
CNBC: "Trading error at major firm caused market plunge".
Unbelievable rationalization. Responsible journalists scrambling for the truth.
At 14:44 PG was hanging onto 60 when some hundreds of round lots hit the bid. They were absorbed with some concession. The trace shows abruptly 10,000 trades of various sizes from many brokers and exchanges in 2 minutes hit the bid which rapidly retreated all the way down to 40. There were about 10% more sales than buys in this waterfall, with an ET flow net less than had occurred in the stock earlier between 14:00 and 14:15 when the stock lost about 1 point.
So what happened? No specialist, pulled bids, and cascading stop losses. Lots of smart people everywhere; smart people designing the electronic machinery, smart people day trading for fun and profit, smart hedge fund managers and institutions doing everything they can to manipulate price to their advantage. Humorously, none of these people succeed with their assigned tasks.
Also humorously, the same routine was occurring in most stocks simultaneously! How is that possible? And doesn't that show that the alleged culrit, PG, as deemed so by smart journalists, wasn't the culprit? It does. There are many culprits but the main one is found in the electronic synchronization of exchanges country wide. There are algorithmic procedures in machines everywhere which monitor the flow and automatically operate under rules such as, "if ABC and XYZ trade at less than x% away from some synthetic mean, sell y% of shares in IBM". This is called "portfolio insurance".
So what was I was doing? Fumbling over myself trying to steal some bargains and failing miserably. You had to execute by 14:48 at which time most of the damage had been repaired to benefit.
These fluctuations show up on charts but they're not actionable. Not even on the floor where you're twice as blind. But they do serve the TA nuts. According to their theory of the "cleanout" the upside over the last 15 months can now be considered a bull market!
1st one
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