Last week the Dow Jones Industrial Average (“DOW”) plummeted close to 1000 points, and only began to right itself as the closing bell sounded. This represents the single most volatile trading day in market history. Just in case you forgot about this already; or, possibly failed to care – here is a link to the story: Link To Ridiculous Story – and another for good measure: Link To Another Ridiculous Story Discussing The Hapless Trader, however, this is my favorite: A mysterious day jolts Wall Street watchers.
The stock photo images of grim-faced and distraught traders on the floor and news reporters are priceless.
Several theories abound as to why, or how, such a thing could happen. Foremost amongst those rabid speculations was a story that some (rogue) trader inadvertently placed a coma in the wrong numerical sequence and initiated a enormous sale order that sent the automated systems into a tail-spin. That means something akin to: “he accidentally pushed the wrong button”. Mind you, this (the event; I very am skeptical about the button) stopped the recent global enthusiasm and the markets upward trending, dead-in-it’s tracks. Markets around the world pulled back – generally stating concerns over what’s happening in Greece… for good measure…
The Greece “thing” has some merit. And, I’ll discuss that later this week.
In any event, that (all the rest of it) is likely nonsense (the theory, not the loss of enthusiasm; or, what’s not happening in Greece).
Today, markets are a bit more bullish, as is the DOW. I can prove this information by having you simply view this link: The Dow on May 10, 2010. I’m quite clever with such things.
Okay… So, what has really occurred is: analysts and traders (think Goldman Sachs needing to “war chest” funds to cover their pending indictment) decided that by pulling off a well-orchestrated scheme stunt (also, and often, referred to, derisively, as: “shenanigans”), they could drop the market and take out a bunch of unsuspecting citizens. They probably shorted key stocks under index. They then picked their bottom-number and started taking buy-side positions in the same stocks knowing they would be bought up by day-traders (a most-excellent example of the sophomoric, if ever there was one) that thought they were buying into an upwardly trending market. So, having hedged their bet, they made big money going both ways at the expense of a lot of people reading this post.
In the weeks to come you’ll read how the Securities and Exchange Commission (SEC) and Obama will call for some vague investigation. But, nothing will come of it.
Peace be to my Brothers and Sisters.
Brian Patrick Cork