Cause of May 6 crash found

Quote from PocketChange:

BS. 75K in S&P Future sell orders would not cause a sell off of the underlying securities and a plethora of securities and currencies not contained in the index.
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Ya, exactly....

Take a look at the charts people - we were selling hard for 3 days before the "crash" - Thurs. was the cover day... it was the final flush smart traders were looking for. Why in the hell do you think we bounced 100 points.

Christ, everyone looking at Thurs. for the cause of the crash - Thurs. was just the final straw.
Just goes to show you why so many people bitch about not making any money in the market - it's because v. few actually know how to trade.

People should stop calling it the Flash-Crash and start calling it the Flush-Crash.
 
I find it interesting that everyone is focusing on what caused it but no one is even mentioning what saved the slow roll and from the bottom at 2:45 pm EST on the 6th.
It could have very well have been Waddell buying back those 75,000 ES contracts. The ES recovered 70 points between 2:45 pm EST and 3:45 pm EST on the 6th.
If Waddell had extracted even a couple points from that spread over that couple hour period of time they would have netted about $7.5M.

Long term a top was confimring setting up sells on April 30th and May 3rd. These positions expired on the 7th extracting 90 and 80 ES points out respectively. We had a perfect storm of information that created it but the White House will find a way to try to regulate it. Our potential loss either way.
 
Quote from ProfLogic:

I find it interesting that everyone is focusing on what caused it but no one is even mentioning what saved the slow roll and from the bottom at 2:45 pm EST on the 6th.
It could have very well have been Waddell buying back those 75,000 ES contracts. The ES recovered 70 points between 2:45 pm EST and 3:45 pm EST on the 6th.
If Waddell had extracted even a couple points from that spread over that couple hour period of time they would have netted about $7.5M.

Long term a top was confimring setting up sells on April 30th and May 3rd. These positions expired on the 7th extracting 90 and 80 ES points out respectively. We had a perfect storm of information that created it but the White House will find a way to try to regulate it. Our potential loss either way.
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I agree. There's so much talk about the "dip", but what about the buying? It was a perfect set up for some.
What about the individual investors where their stop-losses were triggered by the huge spike down? They have realized their loss.. and it was almost impossible to buy back anything during that time spam. It occurred so fast (only day traders would have the time to recover).
 
Quote from ProfLogic:

I find it interesting that everyone is focusing on what caused it but no one is even mentioning what saved the slow roll and from the bottom at 2:45 pm EST on the 6th.
It could have very well have been Waddell buying back those 75,000 ES contracts. The ES recovered 70 points between 2:45 pm EST and 3:45 pm EST on the 6th.
If Waddell had extracted even a couple points from that spread over that couple hour period of time they would have netted about $7.5M.

Long term a top was confimring setting up sells on April 30th and May 3rd. These positions expired on the 7th extracting 90 and 80 ES points out respectively. We had a perfect storm of information that created it but the White House will find a way to try to regulate it. Our potential loss either way.
More...

Agreed! Great post! And yes, I'm wondering what OUR loss will be looking at the ignorance coming out of Washington...
 
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