The reason for the big drop at 2:47 p.m.

[James48843]

It's kind of interesting to do comparisons between what's happened over the last two years, and what happened back in the 1929-1930 time frame. Here's the chart from back then-

See, back then we had this big plunge in 1929, and then it fought it's way back up for a while. In fact, if you look closely, it looks striking similar to the comeback we've experienced over the last year to so- steadily making it's way back towards the higher areas. Here's 1929-1930:

View attachment 9348
Nice, isn't it?

Now compare that to the latest chart we have- where we had a big plunge in 2007- the a claw back until this week- and then this week the drop off the cliff-

View attachment 9349


I would note that Thursday we traded over 8 billion shares- and Friday was 7 billion. That's about double a normal trading day over the last year. Not sure what to think- other than to say that with that kind of volume, it's not done yet acting crazy.



Then- we see what happened later back in the Great Depression:
View attachment 9350

Comparisons? Well, back in 1930, after clawing it's way back up for a bit- we then turned south again. And over the next couple years following the post-1929 crash and 1930 recovery, we dropped another 86% by the mid-1930's.

Scary, isn't it?

One thing you can say- is that the 1929-1930 crash and rebound took a much shorter period of time that the crash and rebound we've seen over the last two years today. Maybe a lot of that stimulus slowed everything down, time wise. Or maybe it's just plain different this time. I'm not sure which camp to be in at the moment.



Are we duplicating 1929-1930?
I don't think so.
But hey- you never know.



​

 

[tsptalk]

How about this?


Live audio feed from trading pits on Thursday at 2:47.

I'm not sure exactly what was traded, but the audio track is pretty interesting...

At one point you can hear the guy say "Morgan Stanley is coming in" as they try to intervene- but even that one is blown away-

And then- it suddenly reverses and goes the other way- and then again collapses-

This is what is happening on the floor during one of those crazy sessions-

That was very interesting. How in the world do they keep up with those trades?

Those were S&P futures contracts being traded and at one point there was a 10.00 spread between the bid and the ask (1060 bid, 1070 ask). It is usually 0.25 or 0.50 at the most. Crazy stuff.

 

[Bullitt]

I'm guessing that's a trader on the futures floor, maybe OEX? He's probably talking to his 'HQ' trading desk. They tell him what to do and he tries to get the best price and also tries to hide his bias so as not to give away an institutions intentions. Pretty amazing, I've read that the guys on the floor are more efficient than these algorithmic bots that we have running the show these days.

Check out this movie (if the link is still good). Paul Tudor Jones shows how it's done in the 80's leading up to the crash.

My question is, who stepped in this past week on the buy side? Who put a floor under the market?

Bottom line: This is the point where the Titanic hit the iceberg. Nobody knows what the hell happened yet, but it's time to grab a life jacket.

 

[tsptalk]

Bottom line: This is the point where the Titanic hit the iceberg. Nobody knows what the hell happened yet, but it's time to grab a life jacket.

Good analogy. Like Bear Stearns in 2008, as you've mentioned before.

 

[Birchtree]

I'm sorry boys but I still don't feel the panic - what happens if it goes up 1,000 points on Monday. I'm ready for action with my dual pistols to hit some targets.

 

[tsptalk]

I'm sorry boys but I still don't feel the panic - what happens if it goes up 1,000 points on Monday. I'm ready for action with my dual pistols to hit some targets.

Never give up B.

http://www.youtube.com/watch?v=qxL11RIEb5Q