What Happened Today?

C

carltonp

Hello Traders,

Can someone tell me if it is really possible for a large investment bank/house to control the prices of all the stocks comprising DJIA? The reason why I say that is because at precisely 14:17pm all 30 stocks from DJ 30 tumbled - and at the same time. I mean they were steadily climbing then boom! They all tanked in unison. I could understand if they lost steam and were sold off gradually, but to suddenly drop and then rise again within minutes leads me to think it's possible for a few large banks to make that happen

I was trading the mini Dow at the time and my style of trading is to buy/sell a contract depending on where the majority of the 30 stocks are going at the time of placing a trade. So I was long around 14:15 and the index was moving up in line the majority of stocks, then everything crashed - I mean all stocks just crashed in unison. I actually thought there was some outside disaster, but then all stocks started to appreciate. Of course I was stopped out, however I would love to know if there was any news event that happened today to cause the stocks to behave the way that they did or was there some entity involved?

Would love to get your comments

Cheers

Carlton
 
Sounds like a large sell program with little depth and liquidity, because that's the way the market is now. No large limit orders on the book. Less specialist and market makers adding to liquidity.

Quote from carltonp:

Hello Traders,

Can someone tell me if it is really possible for a large investment bank/house to control the prices of all the stocks comprising DJIA? The reason why I say that is because at precisely 14:17pm all 30 stocks from DJ 30 tumbled - and at the same time. I mean they were steadily climbing then boom! They all tanked in unison. I could understand if they lost steam and were sold off gradually, but to suddenly drop and then rise again within minutes leads me to think it's possible for a few large banks to make that happen

I was trading the mini Dow at the time and my style of trading is to buy/sell a contract depending on where the majority of the 30 stocks are going at the time of placing a trade. So I was long around 14:15 and the index was moving up in line the majority of stocks, then everything crashed - I mean all stocks just crashed in unison. I actually thought there was some outside disaster, but then all stocks started to appreciate. Of course I was stopped out, however I would love to know if there was any news event that happened today to cause the stocks to behave the way that they did or was there some entity involved?

Would love to get your comments

Cheers

Carlton
More...
 
That's the first time you've seen a sell program? They happen all the time. There are buy and sell programs. They are performed by large funds that arb the equities versus the futures.
 
Quote from carltonp:

however I would love to know if there was any news event that happened today to cause the stocks to behave the way that they did or was there some entity involved?
More...
Not all "news" get to the market. There are sometimes speculations or false news on banks traders chat rooms and they all trade in unison as if it was real. And when it does not flow into Bloom or Reuters it is asumed as false.
I doubt banks call themselves and move the market a couple ticks to pay their starbux cofee break.
 
A fairly large sell order came in and the bots jumped in to arb away the difference by selling the component stocks. As for the subsequent surge minutes later... well thats just normal intraday randomness.
 
Hello Gents,

Thanks to all for your comments.

I've read and re-read your comments and I think Siuya has the key "Adapt, learn adapt" is the key. Before this event I thought I was invincible, I was making between $500 - $700 per day and I thought it would never end. Yesterday, was rough market but I managed to make $701, but ended up losing $1055. It was real eye opener.

Anyway, I scalp the mini-dow. I stopped trading stocks after reading John F. Carters book. It made sense that to trade individual stocks left traders open to all sorts of events that may happen to company - legimate and illegimate. So by trading an Index and buying a contract depending on how well the underlying stocks are performing meant that no single individual company could adversely move an index (unless it has a very high weight in the index). But what really messed up my brain was when I saw all 30 stocks move in unison. I promise you, anyone that was watching the stocks of the DOW will agree with me. It was amazing.

Anyway, thanks for your comments

Cheers

Carlton
 
Take a look at the ARMS (trin) index. This will tell you how many stocks are moving in a direction at one time. People use this index to catch major bottoms or tops. If everybody throws the towel in at once, is that the bottom? Well I'll bet you're buying dips this rally since last year. Time to play both sides...
 
Quote from carltonp:

But what really messed up my brain was when I saw all 30 stocks move in unison. I promise you, anyone that was watching the stocks of the DOW will agree with me. It was amazing.
More...

It happens all the time. Nothing amazing about it. It is called program selling. Nothing fancy about it either. Index arbitrage will also do it. Buy the futures and sell the basket of stocks in the index.

I guess you haven't been trading around 2008 when the market would drop or rally 200 - 300 points 5 minutes before the close.
 
Quote from intradaybill:

It happens all the time. Nothing amazing about it. It is called program selling. Nothing fancy about it either. Index arbitrage will also do it. Buy the futures and sell the basket of stocks in the index.
More...

I haven't come across Program Selling, and I can't say I'm familiar with Aribtrage. However, I will pay close attention to ARMS (Trin)
 
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