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Shades of April 4, 2000
After today's big sell-off and subsequent reversal, I took a quick look at the Nasdaq bubble's top in 2000 to see if I could find a similar day. Indeed, April 4 2000 showed a similarly illiquid market and trading day, as the Nazzy sold off more than 15% but reversed course and ended the day down much less.
Here is the S&P with today as the last data point:
And the Nazzy with April 4, 2000 as the last data point:
And here's a look at where the Nasdq Composite was a year later:
I'm not necessarily calling for a crash-- they key point to drive home is how illiquid and momo-driven/positive feedback this market environment is.
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It was a plot by Proctor and Gamble to sell more Depends. Many have crapped their pants, and Depends are like buying Puts for the next time it happens.
Here the bulls song to ring in the new paradigm:
REM: Losing My Religion
That's strange, because I was actually listening to Out of Time (on vinyl, of course) as the market plunged. Mainly because of the "gold and silver shine" line in "Shiny, Happy People," because I just put in a huge order at Tulving, but still. A strange coincidence.
I was thinking more of October 1987, if so, you ain't seen nothing yet
I would like to be compensated for the heart attack I withstood as well as all the booze I will have to drink tonight to decompress.
rrz shot up---but could not get a trade to execute. Why even have it if it won't sell when the time is right.
Nauf, I was thinking of the exact same example today. I was too young to trade during the October 1987 crash, but that also made a permanent impression. In 1987, that was a buy-in point for the long term investor. In 2000, just the opposite was true.
So, you are right that it may not necessariy be the beginning of the end, but given the inevitable continuing credit contraction, I would bet on seeing DJIA at 8500 again followed by another QE. That will provide the justification needed.
There were times today when my account was double up on paper, but I couldn't execute because the SPY puts I owned we dancing back and forth between crazy expensive with spreads over 50% of the total value, to then less than intrinsic value. While it was frustrating, I can't complain about being on the right side of a day like this.
I'd like to see an intraday chart of 4/4/00 on the NASDAQ. Were the swings nearly as rapid as they were today?
Hmmm, could be interesting...
Is there enough time for the programmers to make adjustments before the NYSE opens tomorrow morning? If not, and they just take the robo-traders off line for a day, what will happen?
A low volume, flat Friday or perhaps, a "bail-before-more-bad-news-over-the-weekend" rout?
I IM'ed and emailed a half-dozen people exactly that! April 2000, same dynamics, but, fortuantelly for me today it was much faster drop and rebound - i didn't get a chance to "hurt" myslf :)
back in April 2000 i started selling with limit orders - but by then the bids were 2 bucks below my limit! (remember, those were $200+ .com stocks, so $2 wasn't too much on % basis) so i panicked and slod at market -got taken out eventually at $15-20 below "real-time" quotes! During the reversal higher, my market orders got executed $5-10 above what was on the screen when i hit "submit" button. In retrospect, i should have done nothing, would have cost me less $$.
today i did sit out most of the day, and happy to say i was down only a few hundred bucks, with 90% in cash!
Where oh where is Harry.....
Really, this is a real question from a neophyte economist wannabe who ended up in healthcare delivery.... Can ANYONE please tell me what the crash was about today?
Does any one of you genius hedge fund managers have any advice for a person who would like to not "let a good crisis go to waste"
On the other hand, would anyone like to marry a cute single 50 year old lady making 150K a year who just needs a little direction on how to make it finally pay off nicely?
HM:
" Really, this is a real question from a neophyte economist wannabe who ended up in healthcare delivery.... Can ANYONE please tell me what the crash was about today?"
it was a viagra induced, prozac party meltdown with a nasty vicodin hangover.......
" Does any one of you genius hedge fund managers have any advice for a person who would like to not "let a good crisis go to waste....."
be careful what you wish for, my darling, it could be a rahm-ish booty call
" On the other hand, would anyone like to marry a cute single 50 year old lady making 150K a year who just needs a little direction on how to make it finally pay off nicely?"
yo, i'm so down with that, so glad to greet ya,....and, uh,..that's definitely not a gun in my pocket, girl.............