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HOT TOPIC Dow poised for a big drop?

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GlobalWealth

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This is the only silver lining to come out of the past week.... The price of crude is headed lower, and the US Dollar is getting stronger.... Who would have ever predicted that?

- Hakrjak
I don't consider either of those to be a silver lining, but that depends on which side of the trade you sit on.
 

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Guest3722A

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Wow. The one day I'm away from my computer because of that W word. Have you guys seen: PWO RGI AOA and PQBW? Fortunately I'm only down a little as I had to make a delivery today before market open so I placed a limit order based on the weekly averages which was pretty low. I'm hoping that tomorrow moves to the upside briefly so I can get out break even.
 

Russ H

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Gee, that was fun. :smx4:

Talk about *typos* . . .

Woulda been a good day to buy Accenture (ACN):

Started the day at 41.78.

Went down to 4¢ . . . closed back up at 41.09

Let me see . . . 1027x increase . . . that's 102,700% . . .

Bet some of the shareholders were crapping their pants.

Ya think someone meant to put in $40.00, and did .04000 instead? :shruggie:

-Russ H
 

CommonCents

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million billion typo my a$$!

HFT is running amok. NYSE said they had market throttling in place which can halt stocks up to 90 seconds. Electronic exchanges do not reciprocate so when the NYSE went offline, the liquidity went poof and there was no support.

Time to put on some absurdly low limit bids and hope to get filled on next vacuum downdraft!

Wall street is no longer financial as much as it is high tech. Co located servers and front running subpenny drag on the market siphoning off the vig on billions of transactions. It's a rigged game and heads should roll. The flash trading algo's can front run and prevent real liquidity thus magnifying market moves.
 

Kontent

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All I can say is wow. A 1000 point drop on the DOW, 30 minutes later and it climbed back up 800 points. Talk about an amazing market swing.
 

Russ H

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Time to put on some absurdly low limit bids and hope to get filled on next vacuum downdraft!
Yes.

While I'm not a trader, this is where millions, if not billions, of dollars were made today.

-Russ H.
 

CommonCents

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Yes.

While I'm not a trader, this is where millions, if not billions, of dollars were made today.

-Russ H.

With the trade cancellations announced by the exchanges it is possible that the buyer gets screwed. A trader buys at the lows and later sells at a profit. The exchanges cancel the buy trade and he has now sold short. oooops.
 

andviv

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And then he takes the money out of the account, and have the company trying to get their money back. :D --but, sreiously, how would that work? I bought cheap, sold high, took my money out, then what? How long does it take for traders to cash out their money?
 

BurnBright

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T+3 so it takes three days to settle your account before you can withdrawl. You also agreed to let the exchange have discression over what trades are good or busted in event of markets like yesterday. I was actually surprised the width of the trades that they will allow, I think they are making a mistake trading volume/volitity for trust of the public.
 
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Guest3722A

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And then he takes the money out of the account, and have the company trying to get their money back. :D --but, sreiously, how would that work? I bought cheap, sold high, took my money out, then what? How long does it take for traders to cash out their money?
If I'm understanding your question correctly, and you're asking how long will it take for your broker to cut you a check for your gains, the answer is after the regulation-t clears which is 3 days and then you can request a check to be sent from your online account, or, do it the old fashioned way and call em as they will send it to you immediately.
 

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Guest3722A

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With the trade cancellations announced by the exchanges it is possible that the buyer gets screwed. A trader buys at the lows and later sells at a profit. The exchanges cancel the buy trade and he has now sold short. oooops.
From my experience in this game something else I'm quite aware of is when volume is peaking up in the red zone, trading platforms themselves will sputter and hesitate which is a nightmare because every second counts during these moments. I've also wondered too how much "slippage" the brokers try to get away with during extreme volume. Like today for example with me, as I said previously, I was gonna see if i could get a little bounce to get out at the least, break even but the volatility kicked in fast and aggressive so when I went to sell for my loss, my broker completely quit working and I had to reload and log back in. WTF? But what else was interesting was that i also use Think or Swim and that software also quit working and needed to be reset.
 

Jonleehacker

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Here's a wild audio recording from the trading pits of yesterday's market crash:

"Guys this is probably the craziest I have seen it down here ever." Here it is, memorialized for the generations and away from the now openly ridiculous disinformation propaganda of the mainstream media, just what a full market meltdown panic sounds like: straight from the epicenter, the S&P 500 pits. Luckily open ouctry still exists, if at least for shock value. Click here for a first hand account of the most shocking 15 minutes in recent market history. Fat finger my a$$.
http://www.zerohedge.com/sites/default/files/Market Crash.mp3
 
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Guest3722A

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Is this the beginning of a correction? Or something more ominous? The volume says it might be the latter! Scary!

What I'm watching is the 1121(ish) level in the S&P to hold for support but if it breaks down, the short side may be a better consideration. 1121 is the 50% retracement point between the market top in late '07, and the bottom last year March. I'm sure you are, but if by chance you're not familiar with retracement theory, Google sp500 1121, to see the mass interest around this number and if you really want to step out a little further, do a search on the theories of WD Gann. -Not the Holy Grail, but does surprisingly hold water more often than not.
 
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Guest3722A

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Here's a wild audio recording from the trading pits of yesterday's market crash:



http://www.zerohedge.com/sites/default/files/Market Crash.mp3
First off, thanks again for this post. I've got traders in other forums saying this is the mp3 of the year. And for anyone who may be interested, that was the voice of Ben Lichtenstein from the S&P 500 future's pit.

Here's a brief biography for those with further interest:

Ben Lichtenstein
Ben Lichtenstein provides live market commentary in open outcry S&P 500 Futures from the floor of the CBOT.

Ben Lichtenstein is President of Tradersaudio.com, a member of the Chicago Mercantile Exchange and has worked on the trading floor in Chicago for over 15 years. Ben Lichtenstein has been a guest on many of the popular news shows including CNBC, Bloomberg TV, Bloomberg radio and has been published in numerous periodicals including Futures Magazine and Stocks and Commodities. Ben has gained the confidence of his clients and the respect of industry leaders as a pioneer in the Futures Industry with his back to basics genuine hard nosed attitude work ethic and unmatched commitment to reliability and consistency. He is dedicated to the development of audio products for traders because he’s seen how valuable and necessary audio is to traders. Ben Lichtenstein has committed himself to providing traders with the most unique data service available and devoted to the distribution of factual content so traders have the information they need to make an educated decision.

In the fall of 2000 after working his way up through the ranks from runner to becoming a CME member and trader, Ben realized traders trading computer e-products from locations off the floor were rapidly increasing in numbers and they were at a severe disadvantage due to the delay and one dimensional limitations of digital quote screens. The goal of Tradersaudio is to bridge the information gap by providing their clients with the information direct without delay from the trading floor, information that once was privy to floor traders only. The concept is simple, Ben has made it possible to see and hear things that are happening on the trading floor without actually having to be on the trading floor. Tradersaudio is your eyes and ears on the floor while you trade form the comfort of your own home or office. It’s like being in the pits without all the pushing and shoving.

For the last six years Ben has been focused on managing and operating his business and has successfully built the company into the mostly widely regarded leader of live audio from the trading floor. Tradersaudio.com is the industries leading provider of squawk box audio to traders around the world.
 

kidgas

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Thursday's action is why I like and use collars in my retirement account. I prefer to hold puts and not stops. I only saw the action after-the-fact since I was travelling with family. I took a small hit in value but that is because I do not have calls sold on everything.

In the account that I am using to test my modified collar strategy, the fluctuations are minimal. It is acting like it is delta neutral and is holding its own quite well.
 
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Guest3722A

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Thursday's action is why I like and use collars in my retirement account. I prefer to hold puts and not stops. I only saw the action after-the-fact since I was travelling with family. I took a small hit in value but that is because I do not have calls sold on everything.

In the account that I am using to test my modified collar strategy, the fluctuations are minimal. It is acting like it is delta neutral and is holding its own quite well.
Myself personally, I've always found options to be risky, not because of my abilities, but because of things like unstable platforms. I use to trade contracts on DELL a while back and would watch it day after day, week after week, tick after tick to the point that I knew it quite well and was quite profitable, as my theory was learn it like a family member, but one day last year I remember that the volatility increased for a reason I can't remember, and I placed my orders to close out because I was on the wrong side and couldn't get my order through! AND, this has happened to me prior to that as well with a different broker. After that day I swore I'd never hold that risk again. Also, something to note, on Friday last week, one of the talking head traders on CNBC was mentioning that his trading platform was unstable and he shut down, so, I know it's not just me through my retail outlet. Has anyone else experienced problems like this?

Also, for anyone interested in learning more about Ben Lichtenstein, and more importantly understand what the heck he even is saying as I'm sure it's gibberish to many here, one of the traders I corresponded with over the weekend posted this utube link YouTube - tradersaudio's Channel which is a tutorial using some of Ben's recent sound files. What's interesting here is how calm he normally is, whereas on Thurday, the guy was a freaking rockstar and did his job. MAJOR KUDOS

In addition, this was also posted from a trader who listened to the file between 2 and 3pm:

QUOTE

"The full audio for the whole hour from 2:00 to 3:00 was fascinating .. at one point he started yelling at his intern or somebody "just do nothing, just watch this and tell your children that you saw this."

He was also making cryptic comments about guys getting dragged out of the pits who had been wiped out. I think the CME has healthcare professionals who swarm down and rescue people having strokes, heart attacks, seizure and mental break downs.

Also interesting to me was the last bit of plunge where there we're no bids, everyone was wiped out or afraid. That's when the big boy desks stepped in and there was no offers on the way up !!!!!

I suspect Larry Summers from the White House and Helicopter Ben called their bitches at Citi and Morgan to fix that sh*t. "

The speculation amongst the trader group is that it was no fat finger mistake rather, it was the Fed liquidating their massive position that's been holding this market up and it fubared! It will be interesting to see what truly happened.
 
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hakrjak

hakrjak

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Here we go back up 5% today on the roller coaster.... I missed out on $2k of gains today by being in cash.... When is this pain gonna end? Son of a ..........

- Hakrjak
 

Jonleehacker

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Here we go back up 5% today on the roller coaster.... I missed out on $2k of gains today by being in cash.... When is this pain gonna end? Son of a ..........

- Hakrjak
the market is only a roller-coaster if you are trading on emotion, which your statements clearly demonstrate that you are.

make a plan, validate it to make sure it has a real edge that can make you money, and then trade your plan.

If you react to every market gyration, you'll always be a day late.

Impose your ideas and concepts onto the market, not the other way around. If your concepts aren't strong enough, then spend time to understand the fundamentals of trading/investing. The market rewards clear thinking, not emotional reactions.
 

kidgas

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Jul 25, 2007
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Hakrjak,
Jonleehacker is absolutely correct. Do NOT trade on emotion. Develop a system with rules and stick with it. That system may involve dollar-cost-averaging, value-averaging, index funds, diversification, asset allocation, options, etc. Regardless, figure something logical out and work with it. Learn from mistakes. Read and modify what you do.

I have developed something that works for me and am in the process of making modifications that I believe will enhance my results. If you have read my posts here, you know that I work with protective puts and collars. If the DOW were to lose 5,000 points in one day, I would take a hit but it would be limited. I don't have to react and can sit and wait to see what happens after a day or two. But you don't have to trade options. Even dollar cost averaging can be effective if utilized in a consistent manner over time. Not fastlane, but not necessarily a roller coaster either.
 

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tchandy

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USA Today provides a reason and explanation for the crash.
Cause of 'flash crash' still unknown but knowledge can help protect you - USATODAY.com

Cause of 'flash crash' still unknown but knowledge can help protect you

Q: What caused the "flash crash" that sent the market reeling on Thursday, May 6, and how can I protect myself?
A: Investors were horrified when during a brief 15 minute period on May 6, stocks seemed to be in freefall.

The damage is explained in detail in USA TODAY's coverage of the historic event:

Details of what precisely caused the horrifying crash will be emerging for months. But at the core of the problem has to do with the way investors' orders are filled by the largely electronic exchanges.

Take Procter & Gamble (PG) stock for instance. The stock is listed with the New York Stock Exchange, which is the primary market for that stock to trade. But P&G's stock actually trades on many other markets, including the Nasdaq, BATS and Direct Edge.

This is a key fact to remember: Stocks don't just trade on their primary exchanges.

On May 6, unrest in Greece helped cause a large spike in stock selling. When an unusually large amount of sell orders for NYSE-listed stocks like P&G hit the market, the NYSE went into "slow mode." That meant the sell orders were diverted to other markets, including the Nasdaq, which doesn't have as many buy orders for the stock.

This was a problem because the other markets, outside the NYSE, didn't have as deep of a "book" or orders from buyers. The price of stocks plunged in order to meet the extraordinarily low bids on the other exchanges.

These flash crashes are especially infectious since so much of our stock markets are electronic. Some systems are programmed to not buy stock if the stock is falling. That means no buy orders were emerging to satisfy the growing number of sell orders.

Meanwhile, there were human aspects that only made the situation worse. Some traders panicked when they saw the NYSE go into slow mode on some stocks, worrying that there might be a huge wave of selling coming.

Regulators will need to take a hard look at what happened with the market, and ensure that the malfunction doesn't occur again.

But there are things you, the investor, can do to protect yourself in the meantime:


INVESTING: How to avoid being flattened by huge stock drop losses

• Don't get overly wrapped up in hour-by-hour moves of the stock market. Had you just hung on to your shares, the whole mess sorted itself out by the end of the day. If you didn't sell, the event was little more than a very strange day.

• Be careful of so-called stop market orders. These are orders you place with your broker to automatically sell stocks if their prices fall to a certain point. A stop market order will trigger and sell your stock at any price, even if the stock is crashing. If you use a stop limit order instead, you can instruct your broker to not sell your stock in a firesale.
 

andviv

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so... is today another crazier-than-usual day at the Market?

Spain is down more than 7%...

how is that going to affect everything here?
 
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hakrjak

hakrjak

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so... is today another crazier-than-usual day at the Market?

Spain is down more than 7%...

how is that going to affect everything here?
Starting to think this recovery has legs in the US, and with the EU crashing -- it's going to be great for the US Dollar, and to keep treasuries and mortgage rates low here. This could be the perfect storm we've been looking for to bring the real estate market back in the USA....

Think I'm staying in and accumulating through this mess until people stop panicing and realize that the US is the only safe place to invest right now.

Cheers,

- Hakrjak
 

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