Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
The Three M's of Hyperinflation : Milosevic, Mugabe, And Maduro - 26th May 19
Global Multi-Market / Asset Charts Review - 26th May 19
An Oil Shock Could Be the Black Swan That Finally Drives Gold Higher - 26th May 19
Brexit Party Forces Theresa May to Resign, Boris Johnson Next Tory Prime Minister? - 26th May 19
IBM - Investing in AI Machine Intelligence Stocks - 25th May 19
Seasonal Dysfunction: Why Generations of Gold and Silver Investors Are Having Such Difficulty - 25th May 19
Employment - The Good and the Bad of Job Automation - 25th May 19
Gold Mining Mid-Tier Stocks Fundamentals - 25th May 19
Buy This Pick-and-Shovel 5G Stock Before It Takes Off - 25th May 19
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Stock Market Crash Around The World In 11 Minutes!

Stock-Markets / Financial Crash May 07, 2010 - 02:58 AM GMT

By: David_Grandey


Best Financial Markets Analysis ArticleWhy are we saying 11 minutes? See the waterfall from about 2290 on this index? It took 11 minutes to go from there all the way around the world and back again in 11 minutes.

Given today’s action in the markets we thought we’d take a few moments to give you our version of an update given the extraordinary events of the day.

As we’re sure a lot of you already know by now that a big piece of today’s sell off was an erroneous trade.

Ok we get that however, the market was already down quite a lot before this around the world in 11 minutes took place.

Over the last few days we’ve been talking about the overbought nature of the markets.

We’ve talked about the negative divergence out there.
We’ve talked about how extended the leaders were.
We’ve talked about trendline breaks to the downside.
We’ve talked about support levels that were broken.
We’ve talked about coming down to the 50 day average.

All of this we’ve talked about in advance of today’s action.

We’ve stressed not to chase stocks and now you know why.

We’ve talked about never biting off more than you can chew with regards to position size trade management. And now you know why.

So you see regardless of what has been happening out there we are more interested in managing risk than we are in touting hot stocks and 100-500% returns like a lot of other websites and newsletters.

On numerous occasions we’ve talked about having some short exposure as a hedge via Inverse ETFs and YES, we know a lot of you out there do from the emails we’ve received over the past month or so. Nice Job folks! You know who you are.

So what does this all hold for tomorrow? We do have one concern and that is what this does to the psyche of the average investor for tomorrow’s open. It’s the chicken little, “the sky is falling” scenario.

Our other concerns going forward over the next 48 hours is that of the overseas markets action tonight. May not be pretty.

“This is the Information Age” and things happen real fast, so expect another wild day Friday.

A retest of the lows of just before the “Around the World in 11 minutes would not surprise us nor would the S&P 500 gapping up 10-15 points either. If the S&P 500 were to gap up like that? Would we be buyers? Absolutely not as it will probably get sold into.

We’ve said the last few days we wanted to see some stabilization and that is still the case. What we want to do though is use the volatility to our advantage. Should we have a spill over from the overseas markets in the morning due to a gap down trap door?
Well? We’d consider buying in the face of some of that fear. One doesn’t have to go full tilt but we’ll nibble and pick some off here and there into that tomorrow. As far as we are concerned the uglier the open tomorrow the better.

What about my current portfolio ? What about my 401K ?

Well what’s done is done. Actually in a weird sort of way it’s good that this is taking place really fast as it gets it out of the way. We just lost a lot of points and we are going into a weekend not to mention we have the overseas markets to contend with. Our indexes have really lost a lot here already so odds favor baring some unforeseen European event we are a heck of a lot closer to being due for a bounce than we were two days ago. While not pretty it is what it is and you might as well just let it go through its gyrations. It’s where we were back in October, 2008 and patience was certainly a virtue then.

You can look at the market a few ways right here.

1. You can get emotional and hit the sell button AFTER we’ve already dropped, and dropped a lot, so that doesn’t make a lot of sense.

2. You can choose to gut it out and deal with the emotional volatility till we get a bounce then you can consider gettting out of some. Sometimes the attitude of “Whatever” is a just what the doctor ordered.

3. You can use it to do some selected buying as after all our motto is “We Do Not Chase Stocks, We let Them come to us” That means buying in the face of fear, the hard part is how much fear? Down 200? Down 300? Heck had you been able to get an order in on AAPL when it was 216.00 within 5 seconds it went to 226.00 We kid you not.

Of course all this does not take into effect of unforeseen news driven events but you have no control over those anyway. That’s where risk management in terms of the size of your positions comes into play.

When in doubt stay out

That cliche isn’t always a bad thing you know. Should the markets implode? Well if you have short positions peeling a little away on strength may not be a bad thing. As for shorting? Understand you are in a high risk environment. We mean after all we’ve been falling sharply for going on 4 days now.

All in all the good news is we’re probably 90% done with the recent what’s became a severe downswing. The bad news is? The last 10% can be the worst emotionally. But we’ve been through it before.

By David Grandey

To learn more, sign up for our free newsletter and receive our free report -- "How To Outperform 90% Of Wall Street With Just $500 A Week."

David Grandey is the founder of All About Trends, an email newsletter service revealing stocks in ideal set-ups offering potential significant short-term gains. A successful canslim-based stock market investor for the past 10 years, he has worked for Meriwest Credit Union Silicon Valley Bank, helping to establish brand awareness and credibility through feature editorial coverage in leading national and local news media.

© 2010 Copyright  David Grandey- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules