Market Crash Imminent?

[GermanTrader]

Quote from ByLoSellHi:

A 1987 style crash would shave off 2464 points from the Dow...

I really wish we would see that happen, and stay there for a year or so, until the rest of our markets could also be corrected, instead of propped up by government intrusion. Make it 4000 points off.

 

[pulsescan]

Quote from GermanTrader:

I really wish we would see that happen, and stay there for a year or so, until the rest of our markets could also be corrected, instead of propped up by government intrusion. Make it 4000 points off.

watch what you wish for.
it could happen sooner than you think.

 

[m22au]

Yawn .... I'm still holding my financial shorts established in 2007 and earlier this year.

From my crystal ball, I find it hard to believe that equities will be down tomorrow, regardless of what the jobs report provides.

Monday morning the S&P futures were above 1300, with an intraday low at time of writing of 1236.50. Although I think there is a lot more downside, VIX +12% to 24.00 is one indicator (of many) that suggests that this is overdone on a multi-day timeframe.

Edited to add: One possible reason for the size of today's decline is the huge air pocket below S&P 1260. However I think 1250 will happen before 1230.

 

[pulsescan]

Quote from m22au:

Yawn .... I'm still holding my financial shorts established in 2007 and earlier this year.

From my crystal ball, I find it hard to believe that equities will be down tomorrow, regardless of what the jobs report provides.

Monday morning the S&P futures were above 1300, with an intraday low at time of writing of 1236.50. Although I think there is a lot more downside, VIX +12% to 24.00 is one indicator (of many) that suggests that this is overdone on a multi-day timeframe.

Edited to add: One possible reason for the size of today's decline is the huge air pocket below S&P 1260. However I think 1250 will happen before 1230.

so what about the move down from 1300 to 1236.50?
that's alot of downside movement. you just don't rally back from that right away. and if you think that there is more downside why hold onto losers? who's to say how much lower we go?
it seems to me that your letting your losers run?

 

[m22au]

I'm confused by your comment - I am continuing to hold my short positions in financials, that I had last weekend, and in the weeks and months preceding that.

i.e., I am letting my winners run, not holding on to losers as you suggest.

Quote from pulsescan:

so what about the move down from 1300 to 1236.50?
that's alot of downside movement. you just don't rally back from that right away. and if you think that there is more downside why hold onto losers? who's to say how much lower we go?
it seems to me that your letting your losers run?

 

[crgarcia]

Quote from RussellDaytrade:

If that happened, markets would still be liquidating afterwards, as there would be massive failures right and left, with all the leverage and leveraged participants, which would take time to sort-out, and effectively 'take-out' those that would be technically insolvent, even if it is only for a brief moment in time, as FCM's and prime brokers would be unwilling and or unable to carry their clients accounts while they're below margin requireemnts.

That's the problem...the system can't handle it

Only fools are overleveraged, and nobody cares about this fools; not even themselves.

Even a blind could see that this is a choppy, consolidation market. It's stupid to be overleveraged here.

The real big players: banks, pension funds, mutual funds are buying now; but only below certain levels.

 

[crgarcia]

Quote from The Kin:

I was looking at bonds again today. The 1 month is yielding under .26%. Don't believe me, see for yourself?

http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml

Valuation is partly derived from the risk free rate plus risk premium. Well the risk free rate is rapidly getting lower, and actual risk is significantly higher than originally thought as evident with Bear Sterns. Sooner or later something has got to give. Either bond yields begin to increase or the stock market has to come down from these levels.

Everyday the risk premium is getting bigger and bigger to justify share prices.

Free markets have a way of correcting themselves. Even if they are artificially being propped up that's only going to last so long.

Just some thoughts...

It has been worse.

Much worse is an inverted yield curve.
When this happens investors don't see any profitable opportunities in the long run (some years), so they grab long term bonds while they can.

 

[capmac]

anyone buying the dips?

 

[Wayne Gibbous]

Quote from capmac:

anyone buying the dips?

I am!

But then I am also getting f*cking killed.

They are system trades tho, and, overall, I will win. That is...if I don't go bankrupt first!

 

[capmac]

Rough open...