Why the drop?

From time to time people tries to give a reason to why the mkt moves in a particular way, especially after the fact that the move has moved in a single direction with a decent size, like the NQ move today of about 20 pts.

Most of the time though, the after the fact explanations cannot really explain what happened :)

After seeing so many moves like that over the years, I am ... speechless :)
 
The best way to explain these moves is to randomly take a headline from the front page of your favorite paper and connect it to the price change.

For example,

DOW drops 100 points (roughly today's intraday move) because GM to Slash 25000 jobs.

It helps to randomly select a headline that has some bearing on economics. While it is no more true than to pick another of today's headlines:

DOW Drops 100 Points today because Experimental Ebola vaccine works in monkeys.

Neither really explains the drop but the GM story sounds more credible as it has something to do with economics and losing 25k jobs sounds scary.

DS

ps- as a trader do you really care?
 
Quote from cakulev:

Anyone knows why did NDX dropped 20 points in one hour?
More...

I was actually wondering about that too? I mean it was my thought that markets only go ONE direction. But... I guess they don't................ they go up AND down.

Wow I was beginning to worry.

Ice
:cool:
 
Quote from iceman1:

I mean it was my thought that markets only go ONE direction.
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No, no....you're thinking of Google. GOOG only goes up. Wait til the market considers the synergies of Google acquiring Microsoft -- then GOOG will really take off! :D
 
I saw a big red truck go by at the exact time the market collapsed in a dramatic meltdown of almost biblical proportions.

Coincidence?
 
Quote from iceman1:

I was actually wondering about that too? I mean it was my thought that markets only go ONE direction. But... I guess they don't................ they go up AND down.

Wow I was beginning to worry.

Ice
:cool:
More...
Of course it goes both ways.
Actually I was short (ever since oil went above 50, not a good trade yet), and was pretty much sure I was going to have a down day.
Oil was falling, bond yield was falling, and consequently stock market was rising. And then wham! I was just curious what made my day. Unlike others I actually believe that stock prices are being driven by some things other than support , resistances, trends and whatnot ..
:D
 
Quote from Aaron:

No, no....you're thinking of Google. GOOG only goes up. Wait til the market considers the synergies of Google acquiring Microsoft -- then GOOG will really take off! :D
More...

And don't forget the 30-Year Bond Futures. It only goes one way. Up, Up and Away.
 
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