Third Biggest Weekly DJIA Drop In History

Tyler Durden's picture

A dearth of knife-catchers and bottom-callers suggests that our views on a broad swathe of investors being caught unhedged and offside by Bernanke's relative inaction was correct. By the look of today's huge selloff, investors will become increasingly aware of our recent post on the difference (risks) between owning stocks and bonds. The equity market remains a market in chaos as the following charts show. We can only assume they must be extremely good at discounting whatever it is that talking-heads believe on a tick-by-tick basis - just look at the flip-flopping in the last two months (and in 2008/09).

Daily Changes in the DJIA:


And weekly changes in the Dow - this last week is almost a 4 standard deviation move and third largest ever (with 9/11/01 and 10/03/08 the only two larger in absolute size!).


Chart: Bloomberg

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Ryman1075's picture

Getting dizzy, but loving the ride.


What does it all mean's picture

So funny... ZH readers have been calling the top for 3 years now... We are closer to the top than we are to the bottom... but no one here wants to hear that.

Trading is about balance... never one sided.

Oh regional Indian's picture

A confirmation bias is a very strong emotion, individually and collectively, thus all your red arrows too.

Davy Jones Is Alive... see that?

yo ho ho, etc...


Troy Davis was a Ritual Sacrifice

What does it all mean's picture

How much is red arrows worth, or green?  I'd rather make money, fiat, depreciated silver, gold or otherwise.

BTW, all SEC/Fed/FINRA have to do, is to ban "selling" period.  No more selling, not just short-selling, selling as a general action.  It's their world, we just live in it.

BTW, knife catching comes in at 5-10 minutes before mkt closes... which is about now.

TruthInSunshine's picture

Susie Orman will be out tonight telling her flock of CNBC-like brain dead sheeple to BTFD:

buck4free's picture

Sort of like in 2006 when she was explaining to everyone how RE was the best investment you could make (outside of a matched 401k) because it allowed common folks to tap 5x+ leverage! I would pay to find that clip...

AustriAnnie's picture

Idk about that clip, but this one is a classic: Sue in 2008 about the gold standard:

Spirit Of Truth's picture

This week is the 3rd largest weekly downswing in the Dow ever (9/11 and Lehman the others).


This is VERY interesting.  All THREE of these largest weekly downswings have fallen ON THE SAME WEEK on the lunar calendar, e.g., the third week of Elul on the Hebrew calendar:

BTW, you can throw Germany's invasion of Poland and the start of World War Two into the mix!

Executioner's picture

@Mr. "?"

Generally, a green arrrow is a worth reading comment. A red is worth joke: so do you make money thinking like that? riiigghhht...
About the licking the SEC/FINRA/Fed hole, congrats, you're a subservient fool.

MsCreant's picture

He was joking about banning all selling...

What does it all mean's picture

Indeed, I am... 

But here is a bigger joke.  @Executioner's very statment will dictate that you only read things that you like, and not thing that you don't like.  I guess ignorance is bliss, but why are you calling me the a__ licking fool?  

Am I trying to earn red?  No.  Am I aiming to get greens? No.  I am just trying to put it in perspective.  Try to read ZH's disclosure on the lower right hand of your browser, then you might understand what I am trying to do.

"It would be very wise of you to study ourdisclaimer, our privacy policy and our (non)policy on conflicts / full disclosure."

MsCreant's picture

When I notice I get too invested in anything going on here (and I have, I admit it) I back off. I like to argue, cheerlead, think, have fun. But if I am taking it too seriously, I need to stop.

Hey, I'll need big (for me) cash in 2 months I don't need now. Should I sell some gold to get it now, or wait out the two months. Come on, waddaya think?

What does it all mean's picture

sell half of your desired amount now...  

That way you will be half right!

Mesquite's picture

GLD ( a proxy for Au ) is down to the 50dma on 2 & 5 month line charts..

Also: $NDX & $SPX @ support...

Maybe a good place for support...??

Yup, POMO tomorrow...( Goood timing..)

JedSmith's picture

Wait it out a couple months IMO. I could give you all sorts of reasons, but if youre already in gold and post on ZH you probably know all that as well as I do.

This doesnt apply to you MsCreant, but I urge friends/family who are getting into PMs for the first time to do their homework. They need to know and understand in their bones Why theyre in the precious metals for days like today when the emotional juices are flowing like crazy.  On paper my PMs lost a ton today. I much prefer to calculate gains, of course. But even on a day like today, I've done very well with the PMs over the years. So I'm looking to add, especially in the case of silver which was knocked down big time. We'll see what happens in the next few days and go from there.  Best wishes in whatever you decide to do - - -

TwelfthVulture's picture

I missed that.

In my defense, with some of the tin-foil hat/prison planet/alien abduction crowd around here, it's not always as obvious as it should be.

Cognitive Dissonance's picture



So funny... ZH readers have been calling the top for 3 years now...

Zero Hedge hasn't been around for 3 years. So what readers are you referring to?

What does it all mean's picture

Come on CD, I cross path with you for at least the last two...  Are you so hysterically happy that you forgot?  Let Tyler settle this.

Before they had this domain and dedicated server, it was on I may be off by 2 months, but really,  Jan. 2009 makes ZH reader even more wrong.  (In aggregate, of course.)


TwelfthVulture's picture

yeah i'm pretty sure i've been coming here for more than 2 prolly close to 3 years now.  sorry, i didn't keep a journal, but i'm pretty sure.  and he's spot on about trading, btw.

Cognitive Dissonance's picture

You didn't address your comment to Tyler, but instead to the top poster. And you pointed to the ZH readership, not Tyler. So what is it that Tyler should settle?

I would say you're using a 10 foot wide brush with that whitewash son.

What does it all mean's picture

Just the facts:


1.  You are the one that claims that I was wrong and Zerohedge was less than 3 years old.

2.  Zerohedge whois records says Jan. 2009, so that makes it at least 2 years and 8 month at the moment. 

3.  Zerohedge existed on prior to a dedicated server and domain.  

4.  I am pretty sure zerohedge readers are in aggregate bearish since 2008/2009.  (I for one, was as well.)

5.  I am probably older than you.

6.  My post directly address the initial story, which is about knife catching and Dow largest drop and what not... I just want to point out the big picture...

7.  Tyler can settle EXACTLY how long Zerohedge as a community exisited and reader base tenure online.

Cognitive Dissonance's picture

Ok ok. I give up. I admit it. You DO have the biggest ego here. And I just have an itsy bitsy one. You beat me.

My apologies. :)

Thank you for stopping by and playing ZeroHedge the game.

Spastica Rex's picture

Oh, come on - this is such an interesting debate, don't stop now! Nah, just kidding. ;)

What does it all mean's picture

CD.  It is not about Ego... it is about facts... get yours own straight before you accuse of others.

You are almost always posting on every thread, but I appreciate the concession, even backhanded one.

It is all a game... some long, some short, some matters and some don't.

What does it all mean's picture

Are you sure it is not because the tape backup stops at 2009 for

The whois record on zerohedge is already Jan. 2009...  (If anything, I bet your information is incomplete.)

So, which is it, am I wrong by 4 months?  (We already established the lower bound of is at least 2 years and 8 months.)

Or am I right and you are focusing on inconsequential details?  Regardless, Zerohedge reader community are generally bearish for the last 2 years and 8 months and we don't like to be reminded of how wrong (and financially costly.) it has been. 

Even if S&P goes to 666, "generally" we are still wrong for 2.5 years plus!  Admit it!  Gotta love the internet, a little knowledge and tool is mightly dangerous....

BTW, I remember when everybody has to go to because the license "expired"and ownership got switched...  In any case, that is not the point!

"Do or do not, there is no try!"...



Crisismode's picture

On 1/8/09 the SPX closed at 1144


Today, 9/22/11 the SPX closed at 1129


And your point would be?

What does it all mean's picture

The same point as I am trying to make in my initial post.

Much ado about nothing...

If nothing else, I wish ZH would be more "balanced" (like Fox... wink wink.) when it comes to cover market statistics...

Like... CHECK OUT SILVER, or SLV, or that damn .RISKBASKET trade that you rebalance EVERY 60 days and call it spot on!!!

Let's introduce this measure... and I give you all the SPX closing prints and the dates that you chose.

# of days the SPX close is above your reference point, call that @ABOVE

# of days the SPX close is below your reference point, call that @BELOW.

# of reference point.

I bet money that for the last 2.5 years to 3 years to however long Zerohedge is in session, the raio is higher and @BELOW is higher than @ABOVE.

I think that translate directly into your pain, assuming you hve the margin and shorted on the first day....  

(The above is TWAP on number of days.  We can do VWAP or any meaning weighting scheme and I think I am still right.)

What is your point?


LongSoupLine's picture

So funny... ZH readers have been calling the top for 3 years now... We are closer to the top than we are to the bottom... but no one here wants to hear that.

That is not correct.

I don't post as often as others, but surely read as often here through the years.  Although you post eloquent, calming and unemotional rebuttals in this thread to support your initial statement (highlighted above), the problem is, your initial statement (I would say "argument", but feel you truly were not seeking debate based upon sentence structure) is flawed to start.

Please allow me to elaborate.  "ZH readers" on average have not been calling tops, but rather calling out the corruption, hubris, arrogance, ignorance, greed and outright engineered criminal intent and execution in global markets, government and industry.  It is not too often (in context to intent of this website) where I witness "readers" focusing on "calling the top".

Your "trading" statement may have merit, albeit not in context with facts regarding your intended audience.

School adjourned.


What does it all mean's picture

Fair enough, ZH posters then...  

Is this a finance site or compliant hotline?  

You have to give me that the general community, due to the aforementioned malfeasence, are tilted toward being bearish... and yet, the market has been up!  (Jan. 2009, Jan. 2008...  doesn't matter..)  TWAP/VWAP, however you want to weight it, the equity market is up!

So you lose money if you are short.

Absinthe Minded's picture

If you've been paying attention, we buy gold and silver, physical only. I'm pretty sure I'm up since my silver dollar cost averaging I paid about $22 an oz. My gold about $1200 an oz. So unless we get one hell of a drop, which I'm not ruling out, I think I, as well as my cohorts here at ZH, have done allright. I like our chances though.

fuu's picture

I'd give you a green but you started with itallics and the bug prevents me.

anyways's picture

well observed. Not sure ZH programmers know that.

What does it all mean's picture

So, basically, he/she gives her/him self a green.


Thanks for the observation.  @fuu.

He_Who Carried The Sun's picture

What's that on the Richter Scale?

MacGruber's picture

Now comes the predicable ramp into the close. I am really curious about who the masked savior is, it's gotta be some gov't funded op.

Love the salad tossers on Bloomberg right now, they have two sell side douchebags competing for misinformation. Favorite quote: "Euro banks are underfunded, but American banks... they are overfunded. They just aren't lending because of the [stupid] regulators". Riiiiight. Soo overfunded.

Manthong's picture

Look at the SPX volume at 3:38 and right at 4:00 p.m..


offensetaken's picture

"This last week is almost a 4 standard deviation move and third largest ever." It makes me wonder who could have predicted a move this large in time to take advantage of it. A move of this size must have been, at least in part, affected by the vast amounts of money pumped into the economy by the QE strategy of the Fed. Really what that strategy did was prop up the economy on very weak stilts. Like an elephant standing on an average wooden chair. The economy was bound to break its support. I will bet that every futures trading professional trading the Mini Dow Jones was caught off guard and with their pants down. Yes this fall came during a normally volatile FOMC week but 4 standard deviations?? Personally I expect a bounce. Not sure how large the bounce will be but it is definitely going to happen. As the saying goes, what goes up must come back down. I believe the inverse of this is true for the markets. An economy doesn't lose real value this quick and the market will correct itself.

MichaelG's picture

"Real value?!?" Speak English, boy.

Edward Fiatski's picture

I'm looking forward to the 2008 levels of oscillations.

PicassoInActions's picture

range bound, good oportunity to stay in the middle

AbelCatalyst's picture

technicals work until the baby boomers start to sweat... there's millions of those little bastards sitting on the edge of their seats ready to sell!  5 years from retirement, this week just pushed out retirement 2 years, and they're beginning to panic...  If we don't get a snap back, watch the outflows from Mutual Funds - that's when the REAL fun begins.  This is just a warm up...