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Guest Post: Where Is This Market Headed?
Submitted by MacroStory.com
Where Is This Market Headed?
“He observed that human emotions collectively had major impacts on the movement of stock prices and Markets in general, ultimately creating patterns that kept repeating.” - From a book on Jesse Livermore's trading style.
Markets at major inflection points are more a function of investor psychology and less technicals and or macro data. The struggle between bull and bear, greed and fear will always play a major role in the success and failure of investors. As Jesse Livermore discusses these struggles are a reflection of human emotions and since human emotion never changes they leave patterns that are repeated.
Up until now the 2007 topping pattern was a spot on comparison. It was ominous in terms of daily candlesticks through last Friday. In fact Friday was probably the most ominous of repeated candlesticks considering the massive swings during the day. Then today came and the market showed its hand. The market showed that great levels of fear and leverage still exist. Buyers are not stepping in and until the supply demand imbalance is resolved this market will move lower.
Over the weekend I began studying the fall of 2008 charts to see if any other patterns developed. What I found was a similarity between the late 2007 market and the fall of 2008 as shown below. The pattern is a series of rallies some rather substantial leading to subsequent selloffs before one final and move lower.
Perhaps the reason for this is that many traders miss the first move whether they fail to initiate a short or fail to get out of longs. I believe this is what sets up the next few rallies until the market finally moves lower and puts in a longer term tradable bottom. A few points regarding the chart below.
In early 2008 the initial selloff which I had been tracking was 15.3% and until today we were right at those levels.
In the fall of 2008 the selloff lasted two months and was 36%. In fact the ultimate trading bottom of March 2009 was almost reached in the fall of 2008 when the SPX touched 835.
I believe the fall of 2008 is more comparable in terms of this initial move lower. In the fall of 2008 there was Lehman, Fannie and Freddie and AIG all collapsing. Today we have Bank Of America, Citi and sovereign nations like Greece, Ireland, Italy, Portugal and Spain.
Notice the similarities between the three rallies and subsequent selloffs as highlighted below. That is the emotional pattern I believe will repeat after this initial selloff ends.
Long Term Divergence VS SPX
Both the long and short term IV skew charts show no signs of selling pressure letting up.
Short Term Divergence VS SPX
As I've stated before I wish I could be more definitive here. This market really showed its hand today. The late day selloff was a sign of funds and or individual investors waiting for a chance to sell into strength to meet margin and or redemption calls only to find lower prices and forced to sell at the close. Bank Of America remains a wild card as well and the companies statement today basically said the market had it wrong. Not the calming words long investors want to hear.
What the fall 2008 pattern shows us is this market can remain oversold for a very long time. Initiating short positions at these levels is very difficult unless one is using hedged option trades such as vertical spreads. The volatility could easily turn a winning trade into a losing one.
Lastly, remember it is human nature for others to relay their fears and limitations upon an event beyond their control. I'm listening to Carl Icahn right now say how this selloff is way overdone. He doesn't see it lastly any longer but what basis does he have for saying that? Other than talking his book he has none. Don't be greedy and don't be a hero. There may very well be more selling ahead of this market.
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can't create the HTML down arrow for some reason
so down
Sepaarately, followed Tyler on Twitter today when ZH traffic was making things slow
I recommend twitter.com/zerohedge
great way to follow the action
but the naked man avatar (ya I know it's a scene from FC) but it's still a naked man avatar, which on the screen in the cubicle sets the office gossips to talking
you talking to me?
i'm fully clothed...it's a medical condition and i'll ask you not to stare.
Viagra is NOT blue popcorn! :>D
To hell in a hand basket?
But at least I'm enjoying the ride.
Ashes to ashes all fall down......bitches.
Everyone on this board needs to read this!
http://seekingalpha.com/article/285737-the-rise-of-financial-terrorism
" There is a lot of evidence that he has deliberately tried to trash the U.S. economy. Even after discovering that the S&P debt calculations were off by $2 trillion, Sharma made the decision to go ahead with the unethical downgrade. This is a guy who was a key contributor at the 2009 Bilderberg Summit that organized 120 of the world's richest men and women to push for an end to the dollar as the global reserve currency. Guess who else are confirmed attendees at past Gilderberg conferences... none other that Michel Barnier and the godfather of hedge fund manipulation Mr. George Soros himself. The financial decisions coming from this group are a having a terrorist-like effect on global markets. The contagious spread of fear is happening before our very eyes."
The official story is starting to come together. US as victim.
There are many reasons for market manipulation. Very Old Rule: Follow the Money.
Hence:
1. Who benefits from the downgrade. Where does the money go. They say Eric Cantor, (U.S.) is short while voting against anything to help.
2. Political Gain: So they hope. Mitch McConnell said his priority is not to help the economy. His priority is to defeat Bambi. At anyone's expense.
Mission Accomplished. He helped trash the Economy, the stock market and hopes this does the job.
3. This is the big one. Follow the Money. Go Back to Rule #1. Where does the money go? Somebody gets your invested dollars. Who?
What algo hedge funds take the Trillions out of the market.
Hmmmmm.
Victim because our credit rating shouldn't have been downgraded? I think we were deserving of it my friend.
Of course we were deserving, but you don't expect that to be the official story do you? No, US as victim plays much better for the administration, don't you think?
US doesn't stay a victim for long in this storyline. Where do the first LGBs (metaphorical or physical) fall.
Oh please. Dont make me laugh. If you mean victim of 3O years of driving the economy like they stole it, you are right.
Hate to say it..but..that link is complete rubbish (utilizing a term from the english folk)
Jason Schwarz is a completely ignorant Ponzi-pologist.
He can take his sour grapes and shove them someplace that smells like the balance sheets he wishes could be sterilized in the name of can-kicking.
Don't want to get sucked under by bear raids? Don't leverage yourself to the hilt with specious paper, whiny assholes.
"I'm not even sure how to conclude this post"
Lack of imagination. Surely S&P's timing speaks volumes: Friday of the worst week in recent memory. And surely Mr. Sharma is not authorized to push the button.
Think "brain magic", it's all about directing attention.
http://www.youtube.com/watch?v=GigYWy2UmOY
It's useful to think what could this meltdown in the making achieves. I'm thinking war in the Middle East soon, closing the Persian Gulf for decades and taking of Latin America's oil reserves. Then you have your American century.
Asia is 100% blowing up at the moment? Is BAC done or something? Seems like it has to be something more than the simple downgrade because this is shere panick.
Crude is plummeting, headed for sub 20.
how soon before that brings gasoline under $2.00? Looking to do some mudding.
i went on sunday down at cripple creek...got stuck thrice -- but that's why you go in the first place.
get a toyota...gms & fords tip it back with ghusto.
Heading up Bernanke's colon.
OT
Thanks to Atomizer for this find:
***THIS IS A TRUTH-RED PILL BREAKING NEWS ALERT***
The Bernank's Key Advisers Have Officially Now ALL Quit Their Posts.
I Repeat; The Bernank Is Being Bailed On By Even His Former Man-Servants & Lackeys.
Black Flag Color Code Is Now In Affect. I Repeat; Black Flag Color Code Is Now In Affect.
God Save The Amerikranski & Global Ponzi Scheme. The Amerikranski & Global Ponzi Scheme Is Dead. Long Live The Amerikranski & Global Ponzi Scheme!
Bloomberg Link -
Fed's D. Nathan Sheets Resigns as Bernanke's Chief International Adviser***THIS HAS BEEN A TRUTH-RED PILL BREAKING NEWS ALERT***
Asia and Europe were off big last night, we were off big today....Asia is off bigger right now...time will tell. If Asia and Europe close down big, then I say we have a big down day tomorrow. The truth always reveals itself over time, eh?
Hong Kong has blown up.
Hang Sen 40 -1,458 points down off -7.16%
Make that a double shot of ouch please, with a dash of bitter recrimination.
The markets are inflated and bloated carcasses floating down the river. They reek. They deserve to popped and sunk to the bottom of previously mentioned river and forgotten for all time. Only to be revisited in rustic bardic tales of financial caution for future generations.
Ouch
Boom!
With the budget crisis now behind us and smooth sailing ahead:
81 congressmen going to Israel on break
Perhaps seeking a salty dip in the Dead Sea to end a stressful debt debate, nearly one in five members of the House of
Representatives will use their summer recess period to visit Israel, The Jerusalem Post reports. Of the 81 heading over,
55 are Republicans and 26 are Democrats, The Post reports. Half of the freshmen Republican reps - 47 of them - make
up that group, and many of them will be visiting Israel for the first time.
Among the Democrats heading over is Illinois Congressman Jesse Jackson Jr., who will be there for an eight-day visit, the
Associated Press reports. Jackson, like most congressmen on the sponsored trip, is scheduled to meet with both Israeli
and Palestinian leaders. The famous civil rights leader's son told the AP that he's looking forward to learning about Israel's
business and commercial sectors as well as the latest tools and technology the country is using in its fight against terror.
Almost all of the week-long trips are sponsored by the American Israel Education Foundation, which promotes similar trips for
Congress every other August, the Post reports. House Democratic Whip Steny Hoyer will head the Democratic delegation,
and House Majority Leader Eric Cantor will lead one of the Republican groups.
American Israel Education Foundation is a supporting organization of the American Israel Public Affairs Committee, or AIPAC,
which describes itself on its website as "America's leading pro-Israel lobby...AIPAC works with both Democratic and Republican political leaders to enact public policy that strengthens the vital U.S.-Israel relationship."
Maybe they want to join protests in Israel and promote human rights, peace and cooperation?
Since the Financial Services industry is tapped out at the moment, the US Congress is for sale to the next highest bidder. AIPAC is the global best bid. Where are Big Pharma, Big Oil, Defense, Tobacco and the other contenders? AAPL could buy the lot with their petty cash but what would they do with a bunch of morons?
"Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort."
"No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince or foreign State."
Book em, Danno.
Asian markets are not happy at the moment...
We're all gonna die.
There is no hedge to reality.
Is there a reality to hedge?
<stumped>
There is no hedge against reality.
Ontological Hedge
To be, or not to be: that is the question: Whether 'tis nobler in the mind to suffer The slings and arrows of outrageous fortune, Or to take arms against a sea of troubles, And by opposing end them? To die: to sleep; No more; and by a sleep to say we end The heart-ache and the thousand natural shocks That flesh is heir to, 'tis a consummation Devoutly to be wish'd. To die, to sleep; To sleep: perchance to dream: ay, there's the rub; For in that sleep of death what dreams may come When we have shuffled off this mortal coil, Must give us pause: there's the respect That makes calamity of so long life; For who would bear the whips and scorns of time, The oppressor's wrong, the proud man's contumely, The pangs of despised love, the law's delay, The insolence of office and the spurns That patient merit of the unworthy takes, When he himself might his quietus make With a bare bodkin? who would fardels bear, To grunt and sweat under a weary life, But that the dread of something after death, The undiscover'd country from whose bourn No traveller returns, puzzles the will And makes us rather bear those ills we have Than fly to others that we know not of? Thus conscience does make cowards of us all; And thus the native hue of resolution Is sicklied o'er with the pale cast of thought, And enterprises of great pith and moment With this regard their currents turn awry, And lose the name of action. - Soft you now! The fair Ophelia! Nymph, in thy orisons Be all my sins remember'd.i think sartre bumped his bony shin up against that one...but we all have, it's only human.
Hamlet was such a whiny little b.
1,2,3 what are fighting for? Don't ask me I don't give a damn the next stops Afghanistan."...........There ain't no time to wonder why, we're all gonna die!
"I'm listening to Carl Icahn right now say how this selloff is way overdone. He doesn't see it lastly any longer but what basis does he have for saying that?"
The Bernanke Put!
QE3 will come to prop up the market. Even Marc Faber believes the market is oversold because Print maestro Bernanke will step in to save the day.
A day is all he might save. The half-life on these bailouts is diminishing with each one. What did the most recent European bailout do? Bump the market for an hour? I think QE has lost his magic. The question I have is, does Bernanke know QE will fail to even prop up the markets right now, and decide not to fire his last bullet, or does he go ahead with the suicide play, and when it fails and all markets blow through to new lows, he claims he did all he could and point the finger somewhere else?
Cm'on, put a bone thru yer nose, shake your rattle and think like an Economist for awhile... :>D
"The pattern is a series of rallies some rather substantial leading to subsequent selloffs before one final and move lower."
Q: at what technical support level do you anticipate the market will start this series of rallies? What will be the catalyst?
The remarkable thing about the recent sell-off is not only the overshoot of the 15.3% sell-off level, but also the noticeable lack of any significant rally.
Permission to treat as a hostile witness, your honor?
are you a lebowski acheiver?
permission granted.
Sorry to hear about Bunny, Mr. Lebowski.
it was to be expected, goddam nihilists!
nihilism: yes, it's as exhausting as it looks.
I just wish I hadnt had the keen timing to buy a thousand shares of ewz right before tshtf. Oh well...the rest of my funds are in cash. What the fook to do now? Chase gold? Short gold? Triple down on my only risk asset? Sell volatility? Buy volatility? Buy spanish bonds at the open? Serious enquiries only please. I should just have an internationally diversified low pe stock portfolio and real estate with 15 percent precious metals, but that would be no fun.
IDK man, I was on market sabbatical for months. I jumped in last Thursday mid-morning made decent gains. I am incapable of pulling Reggie Middleton 5128% gains.
RUSS, TZA and YANG did real well Monday.
Disclosure: I am holding VXX (142M volume Monday), DRV and FAZ. First sign of something I don't like, I am out.
Hit and run!
EDIT: Woke up this morning and saw green futures. W.T.F. Cleared out my positions right away. Couple days of bear action I came out ahead, but with an anti-climatic end...
hahaha got caught with no gold..
thats what you get for being all gung-ho on the illuminati toilet paper!
lmfao
All of those insolvent pension funds that are relying on 8% returns are looking really good tonight..
Another thing I thought about is Shelia Baer..Is she gone yet? I heard on a program this afternoon that BOA had 800b of customers deposits..Ya think the FDIC can cover that shit..They will get bailed if they belly up..
I was reviewing my charts and there does appear to be extremely strong support at the price level around zero.
Check out this website for great added analysis to Zero Hedge:
http://www.collapsenet.com/154.html
Mike Ruppert is an absolute truth-teller. He knows these banksters through and through.
+1776
shock and awe bitchez
There's nothing more therapeutic than Austerity and Depression
to focus Body and Mind and restore some healthy sense of Reality and fundamentals.
It's been long overdue ;)
this is the deleveraging of the Feds 3 trillion stimulus Bubble !
expect markets to breach march 2009 lows !
Gold? Houston, we have cleared the tower!
That post had exactly zero information content. Are you on the right board?
Did you know Wikipedia says a donut is "a poor man's substitute for women"?
No it doesn't
I'm starting to understand why Tyler broke your fuckin' teeth.
Mmmm, bear claws! :>D
Golden Bear clawz.
hey buddy,
y'all gonna make another stab at proving futility again this autumn? i know you PAC 10 boys are all about tradition and all, and the effort y'all make to field a 'team' is precious and commendable, but it seems valuable resources are being wasted on the gridiron when they could be directed to your best, last hope: girls field hockey. at least you can hear it on the cal campus when those bitchez pop pads.
california, i'll be knockin on the golden door/
like an angel/
standin in shaft of light/
risin up to paradise/
you know i'm gonna shine/
janus
If the globalist economy is a giant ponzi scheme and/or there are hard-set limits to growth, then at some point, everything comes undone and no existing form of technical analysis will be able to adequately predict - or even describe - the results. Maybe this is the event horizon.
The ZH crowd is truly scrutinizing the abyss with binoculars.
The Elliott Wave Theory presents a good case for explaining what's happening. I don't use it for day trading, but because I've studied it, I was ready for this reversal. Been waiting 12 months for it, actually, but I knew it was inevitable. If you're long, you should be ready to bail on the next bounce, which could be strong, whenever the current freefall finds a near term bottom, but after that bounce, look out below. But that's just my opinion, and I'm not a financial advisor, just a schmuck trying to survive this mess.
This is gonna be beautiful! As an "unintended consequence" of the congressional hearings, first Fitch and then finally Moody's will both begrudgingly DOWNGRADE the US as a result of the detailed information revealed by S&P. Then the markets will COLLAPSE in a final crescendo because of the fucking morons on Capitol Hill! Wheeeee! This investing stuff is easy! Hats off to Mogambo!
THE S&P 500 MONTHLY CHART THAT FORECAST THE CRASH...
http://bit.ly/x618
TD: Wouldn't there be a way to take the money supply added to the economy since QE2 started and back it out to see where this market might be headed?
Yes, but you'll need to draw the pentagram and provide the goat.
Charting does provide a view of mood psychology. It's also important to note that many algorithms are programed with key levels embedded within them. You can see stocks bounce off of key support levels as if they are invisible walls when they averages come close to them, so charting does have an impact on markets.
The problem that I have with this article is that is surmizes that general charts can forecast this meltdown. I don't see the link between the dynamics of how cdo spreads in 2007 (which very few people understood back then) and the subseuent market collapse could correlate to what is going on now.
While the article doesn't make the connection between technical support levels and market activity, I think a focused discussion around how technical analysis is being used in hft algos, is influencing market activity. 89% of the market is traded via robots with trading being held on average for 11 seconds. There is something to this.
32 years later after leaving the desk, I've never had this kind of instant market analysis. First call is a joke when stacked next to ZH. Thank you for being in front...
i don't have your perspective, and i'm just learning; but it's overwhelmingly awesome even for me...i cruise the site overcome with wonder and excitement every day now.
best thing on the web; way better than nude sunbathers on greek beaches
ZH combines both fundamental and technical analysis in one donut, to be eaten by either the consumer or the producrer of the donut.
i'd be very interested to know what you think of things, the market i mean. short term/long term perspective. what do you see in the current dynamic that sets it apart -- if anything?
Since last Thursday's dip, "market specialists" have been vehemently touting that everything is "way oversold" and that it was a great buying opportunity, therefore everyone should sell their kidneys and grandmothers and buy into "the most attractively priced market of the year".
Three days to today and a healthy 2-3 trillion dollars chunk of liquidity off the "still oversold market" which is heading firmly into oblivion like a base jumper with a parachute the size of a condom, people are clamoring for Mr Bernanke's signature move - The Put - which the market in its addiction withdrawing fashion so desperately needs.
So I ask you ladies and gents; Will the esteem chairman do what he is expected by everyone according to the MSM tomorrow? It is clear that something is afoot as it is also clear that Market ? Economy, and what the Market wants will send the economy into a post euphoric crash through bubble inflation / fiat debasement at some point, or will he wait for DOW = 10060, which by the looks of it might come much earlier than Jackson Hole's meeting?
DOW 10060. Doable by lunch tomorrow, it seems.
But I thought "Mr. Market" is always right? Why is that phrase not ap pro po concerning BAC?? Because it says this is a company that is fucked????
New FASB Rule: Mark to Ashes.
everyone on fast money says it's a buy. the fat chink, the tranny wop, scaramucci, the emerging markets imbecile, the fat kike fraud who thinks she's hot, and the jew who pretends he's a guineau.
they all agree. and they're experts. otherwise they wouldn't be on the jewtube. Would they?
Traveling into Wall Street, Pat Bologna was assailed on all sides by market talk. He was astonished to hear how good-natured were his fellow passengers. Bologna put it down to the surprisingly optimistic tone of the morning papers; apart from the Times, most of the papers predicted that the situation would today be retrieved by "banking support." Bologna felt the subway train was "like the Titanic," with its fellow passengers putting on the same brave faceas those on the great liner had reportedly done as she was sinking.
One of the subway passengers, a night manager in a Manhattan hotel, had a captive audience for his tale about a wealthy Midwest industrialist who had checked in the night before. The guest was a regular, with a standing order for a magnum of champagne and a call girl. As soon as he'd settled into his suite, the champagne was delivered--but the girl failed to materialize. The man rang up the night manager, who promised to send up a girl. Moments later there as a knock on the suite door--and, when he opened it, the guest was confronted by a beautiful blonde. The impatient industrialist yanked her inside and told her to undress. The girl icily told him she was his broker's secretary. She handed the dumbfounded man a margin call for $400,000 and departed. Minutes later, the desolate guest checked out, his sexual appetite, like his fortune, suddenly diminished.
The Day the Bubble Burst
Gordon Thomas and Max Morgan-Witts
pg 384
Gold $1,950+ by Friday afternoon.
In the past five days--except for brief forays to some showgirl's apartment--Livermore had barely left the office. The sequence of events that had caused countless thousands of "minnows" to be ruined and billions of dollars lost excited him more than anything, or anybody, could. He relished having to call into play his unsurpassed market skills.
Livermore had been driven at times to the very edge of disaster; on each occasion, using brilliant financial ringcraft, he had fought his way out of trouble. When others predicted prices would rise, he kept his nerve and remained on the short side of the market: Prices fell, and Livermore collected. On other occasions he had been long, buying through a large number of brokers, to avoid arousing suspicion, blocks of shares in anticipation of a rally. He had been more often right than wrong, and managed to maintain his financial equilibrium while lesser operators had seen their fortunes virtually vanish.
The Day the Bubble Burst
Gordon Thomas and Max Morgan-Witts
pg 385
What bullshit. Livermore was a plunger. He had great speculative skills and made several fortunes but he also went broke numerous times. In other words he was not a magician, he made mistakes, and he paid for them too.
Crawford's eyes swept the Exchange. Instinctively, he glanced toward the visitors' gallery. It was empty; it had not been reopened since its closure midday on Thursday. The superintendent was relieved reporters were unable to peer down on the bedlam already developing on the floor. Veteran traders, clerks and page boys were running wildly around the perimeter before darting into the jostling mass in the center. The floor was littered with discarded pieces of paper.
And even as Crawford raised his gavel, the din from below increased to a "baying roar." The sound of the gong was lost.
"Twenty thousand at the market!"
"Thirty thousand at the market!"
"Fifty thousand! Sell at the market!"
General Oliver Bridgeman, U.S. Steel's battle-scarred specialist, flinched at the hammer blows. Steel plunged through yesterday's ruinous close of $186 a share with girderlike force.
The rest of the market tumbled with it, sucked swiftly down by the uncontrollable crowd besieging Post Two.
During the first three minutes of trading 650,000 Steel shares were dumped on the market. At the end of those three minutes, few buyers were interested in the stock at $179. It seemed a lifetime since Whitney had bid $205.
Steel's collapse created ugly panic. Men swore, shoved, and mauled, clawing at Bridgeman, forcing him to take refuge inside Post Two.
A messenger struggling through the crowd suddenly found himself yanked by his hair off his feet. The man who held him kept screaming he had been ruined. He would not let the boy go. The terrified youth at last broke free, leaving the man holding tufts of his hair. Crying in pain, the messenger fled the exchange. His hair never regrew.
Behind, he left a scene of increasing pandemonium. As huge blocks of shares continued to be dumped at all seventeen trading posts, 1,000 brokers and a support army of 2,000 page boys, clerks, telephonists, operators of pneumatic message tubes, and official recorders could sense this was going to be the "day of the millionaires slaughter."
The Day the Bubble Burst
Gordon Thomas and Max Morgan-Witts
pg 388
A few feet away, at Post Twelve, Crawford could see Mike Meehan's mouth moving, but he could not hear what the broker was saying because of the noise.
Radio had fallen dizzily. In the first frantic moments of trading, its value had depreciated $10.25 a share. The stock was selling now for $30.
At the far end of the hall, at Post Seventeen, men were literally charging into the crowd in an effort to get to the specialist in International Telephone and Telegraph, whose stock had fallen $17 and showed no sign of stopping....
...At Post Twelve--Ed Schnell's Alamo--the defenses were breached as sell orders for Radio poured into the post. It seemed to Schnell, "the heavens had opened up, and the stock was being pounded, down, down, right down to $26."...
...Many of the brokers who had seen Steel smashed to smithereens moved across to Post Twelve, there to witness the onslaught against that equally sacred stock, the pride of the House of Morgan, Allegheny. It was a knockout blow. Allegheny had been one of the investment trusts that optimists claimed would give the market strength.
At Post Six, a fight broke out as a scramble developed to sell American Can. Two clerks, possibly rendered momentarily senseless by the noise, lashed out at each other. The specialist in General Electric swiftly separated them, and returned to the fray. His stock had dropped at the rate of a dollar every ten seconds during the first six minutes of trading.
Post Fifteen--the home of some of the most prestigious stocks--found Westinghouse wilting under the bombardment. It dropped $2 a minute between the time the market opened and $10:15 A.M. At its present rate of decline it would be worthless by noon. Another of the post's stocks, Timken Roller Bearing, was skeetering toward oblivion even sooner, driven there by a 25,000-sell order which lopped $19.75 off its value.
William Crawford, pushing ruthlessly to get to the edge of the floor, reached Post Four in time to hear a strangled shout to sell 50,000 shares of General Motors, again "at the market." The order was executed for a drop of $2.25 below its previous price.
The Day the Bubble Burst
Gordon Thomas and Max Morgan-Witts
pp 389-90
.
How will all of this be resolved? War. Total war. Forget about how much you will make off the rise in gold/silver.
My thoughts exactly. Coming to the Middle East theater soon.
An ME war means that the new debt ceiling is breached very very very fast, and the price of oil is going to spiral upwards beyond the radioactive clouds.
The US economy, wounded as it is now, will not survive.
Now crawford heard a new sound. High and wailing, the words were indistinguishable at first, their source somewhere inside that same mob around Post Four, where Anaconda Copper was toppling even faster than Southern Pacific--the railroad stock whose collapse had led the 1907 panic.
Then Crawford saw him; middle-aged, collarless, a rent in his jacket--"he looked more like a Bowery bum than a broker." The man struck out blindly from the melee, moaning, "I'm sold out! Sold out! Out!"
Before Crawford could reach him, the broker was swept along in the huge overspill surging around Post Eight, where shares in Montgomery Ward were "falling quicker than cans off a supermarket shelf."
The superintendent reached the comparative safety of the New Street side of the Exchange. One of the guides who normally would have been on duty in the visitors' gallery pointed toward a Translux screen. The figures sliding across continued to tell a story of total disaster.
Blue Ridge, yet another investment trust, was on the floor. It had opened at $10. Now it was $3. Not long ago it had traded at $24; there was confident talk then it would go higher.
A sale of 50,000 shares of United Corporation saw the stock slither drunkenly from its opening price of $26 to $19.30.
Crawford knew Blue Ridge and United had been favorites among small investors.
The "dream stocks"--Paramount, Fox, and Warner Bros.--were also taking a trouncing.
Ed Schnell felt as if he had been working for hours. His throat ached, his hands were grubby from handling so much paper. And all the time sell orders streamed to Post Twelve; he began to fear every share ever issue in Radio was going to be dumped.
At the adjoining Post Eleven--where the Bouviers could not stop American Smelting from melting away as fast as Kennecot Copper--suddenly, for no discernible reason, the crowd turned their fury against Woolworth shares. The chain-store stock had held firm since the opening; now, against a great, sustained roar of "sell, sell, sell," it too gave way.
The Day the Bubble Burst
Gordon Thomas and Max Morgan-Witts
pp390-91
Unrelated but important:
http://thefinalphaseforum.invisionzone.com/index.php?showtopic=44
http://www.youtube.com/watch?v=Q_OlaPBwfjY
"Men go crazy in congregations; they only get better one by one"
did soviet agents call down norad?
did soviet agents bring dow building seven?
is nano-thermite a soviet technology?
i think your theory has so many holes they're not even worth addressing; and i don't want to break you in half till your done posting those crash anecdotes.
Dotted around the trading floor were some forty governors of the Stock Exchange. On heavy selling days in the past, it was said they had sometimes joined forces to create the basis for a rally by using the tens of millions of dollars they controlled to force some stability into the situation.
In today's selling maelstrom they were flotsam; out of touch with each other, separated by groups of near-demented men, the governors could do nothing to stem the ferocious waves of liquidation.
Richard Whitney was also on the floor. Pushed and shoved, like everyone else, the acting president was being almost totally ignored.
His appearance had at first raised the hope he had arrived to again make the saving gesture by bidding for a big block of U.S. Steel. But Whitney made no such move, and it was assumed the bankers' consortium had been disbanded. It had not, but the injection of funds it sent into the market for the purchase of shares was insufficient to make any noticeable difference. Whitney could only stand to the side and watch as the institution for which he was temporarily responsible transformed itself into a madhouse.
Superintendent Crawford eased himself down to the vicinity of Post Sixteen. There, Warner Bros' zigzag downward was being overhauled by the plunge in Safeway Stores and Simmons--the mattress company stock which had taken Winston Churchill's fancy.
A man, a complete stranger to Crawford, broke out of the crowd and lunged at another stranger--who sidestepped. The man careened on out of the main entrance into Wall Street, "screaming like a lunatic."
Shaken, feeling he was in the presence of "hunted things"--a phrase Whitney would also use later--William Crawford backed toward the staircase leading down to the basement.
He looked at his watch.
It was ten-thirty.
In all, 3,259,800 shares had been sold for a combined loss of over $2 billion in just thirty minutes.
The Day the Bubble Burst
Gordon Thomas and Max Morgan-Witts
pp391-2
please keep psting these.
love the name.
hate the avatar.
London opened, lost 5,000 and is currently tanking, and officially entered Bear territory.
It just gets worse. The FTSE 100 just slumped by 277 points, or nearly 5.5%, to 4791. This was prompted by the news at 9.30am that British factory production fell unexpectedly in June, adding to a glut of disappointing news on the UK economy.
Ain't no HFT around in Livermore's day.
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