You Don’t See That Every Day: 6 Minutes of Insanity

At around 2:30PM the SPYs were trading down to 113.60 from 117. It seemed like it was a good place to start looking for a bounce. I was keying in on the 113.10 level from March 5th as a potential dream price to get long. I got stopped out below 113 a few minutes later.

At 2:42 I decided to give the bounce one more try. I bought some SPYs at 111.80. By 2:48 I had watched my position drop to 106 and then trade back up to 113. That was more than enough for me. I sat out the rest of the day. A few of our traders were able to take advantage of the wicked price action without taking on too much risk. Good for them.

I honestly can say that I have never seen a move like that in the 14 years I have been trading. I remember the time the NASDAQ was down 400 and I was down 100K before we bounced back to positive. But this time there really wasn’t a bounce. We just went straight up for 3 minutes after going straight down for 3 minutes.

I guarantee you there will be calls from vocal politiicians to have hearings about the current structure of US equity markets. Many will wonder how the market can drop 5% and then rebound 5% in a matter of minutes without significant breaking news. And I’m sure many will put the blame smack dab on the heads of the quant hedge funds. Pehaps they are right. Doug kass wrote an article a couple of days ago predicting just this type of occurrence because of the quant funds who he believes add no value to the marketplace.

Comments

Tags: 7, day, dont, every, insanity, minutes, of, see, that, you

Ivan

That was crazy – I bet many people lost a lot of money with their stops activated (thankfully, mine were tight)
I got lucky because I was long at the time JPY betting on second leg to follow the huge spike in the morning

It’s terrible though, that what looks a human or computer error(or HFT craziness) can cause such a havoc.
Hope politicians and regulators don’t overreach.
Ivan

That was crazy – I bet many people lost a lot of money with their stops activated (thankfully, mine were tight)
I got lucky because I was long at the time JPY betting on second leg to follow the huge spike in the morning

It’s terrible though, that what looks a human or computer error(or HFT craziness) can cause such a havoc.
Hope politicians and regulators don’t overreach.
eric

i was looking for bounces too……….
eric

i was looking for bounces too……….
Tom

i was watching aapl like a hawk almost entering down 12 points then i blinked looked at the tv then back and much to my shocked disbeilief it was down 47 to $200. thats when i sat back and saiid forget it . Unreeal wish i had the vision to snatch some near the bottom of that hammer .
Tom

i was watching aapl like a hawk almost entering down 12 points then i blinked looked at the tv then back and much to my shocked disbeilief it was down 47 to $200. thats when i sat back and saiid forget it . Unreeal wish i had the vision to snatch some near the bottom of that hammer .
http://www.investingwithoptions.com/ Steve Place

I sold some vol into that “dip,” was a little nuts.

I was on stocktwits TV during the entire move, I’m def going to review how I reacted while talking to see how I can improve my psych profile. Was very interesting.

The one “value” quants claim they have is that they provide liquidity to the markets, therefore their existence is justified. The price action seen today shows evidence to the contrary.

– S
http://www.investingwithoptions.com/ Steve Place

I sold some vol into that “dip,” was a little nuts.

I was on stocktwits TV during the entire move, I’m def going to review how I reacted while talking to see how I can improve my psych profile. Was very interesting.

The one “value” quants claim they have is that they provide liquidity to the markets, therefore their existence is justified. The price action seen today shows evidence to the contrary.

– S
Hank Lapson

The quants only provide liquidity in the context of frontrunning large orders or arbing intermarket. If its all going down, they hide under their mommies bed.
Hank Lapson

The quants only provide liquidity in the context of frontrunning large orders or arbing intermarket. If its all going down, they hide under their mommies bed.
Vladimir

audio of the S&P index pit.

http://www.mediafire.com/?ntq2didlygz
Vladimir

audio of the S&P index pit.

http://www.mediafire.com/?ntq2didlygz
OC

I got long around 2pm and my positions didn’t work. I took a medium loss and sat back to watch the market as the ‘internals – tick were very negative and I couldn’t see any technical set-up to give me confidence. This post gives me confidence that I took a good decision.
I though that today I’ll open the smb blog and read a lot of posts with words like: chop, crushed, smacked, excellent, times to be a day trader, etc… I guess you are human after all
OC

I got long around 2pm and my positions didn’t work. I took a medium loss and sat back to watch the market as the ‘internals – tick were very negative and I couldn’t see any technical set-up to give me confidence. This post gives me confidence that I took a good decision.
I though that today I’ll open the smb blog and read a lot of posts with words like: chop, crushed, smacked, excellent, times to be a day trader, etc… I guess you are human after all
http://www.daytrading.de Philipp

what a crazy day! listen to the cme e-mini sqwak someone postet via twitter – plain crazy
http://www.daytrading.de Philipp

what a crazy day! listen to the cme e-mini sqwak someone postet via twitter – plain crazy
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