Stock Market Crash What is Going On?

Saturday, May 8, 2010
By Paul Martin

By: Robert McHugh PhD
MarketOracle
May 08, 2010

Where do I even begin. Thursday, May 6th, saw the single largest daily decline in the history of the U.S. Stock Market. But, even more amazing is that most of it occurred in a matter of 10 minutes, between 2:40 and 2:50 pm EST. During that ten minute period, the Industrials fell approximately 600 points. It was a scary drop, an all-out panic attack, a stock market crash free-fall where bids were absent, and selling pressure was powerful. At the bottom, the Industrials had fallen 1,010 points Thursday. Then deep pockets intervention appeared and bought markets hard, stopping the dive, and driving prices higher.

The previous greatest single day decline was 780.87 points on October 15th, 2008, inside a multi-week stock market crash. Even though there was a 600 point bounce into the close Thursday, the Industrials and stock market still ended the day down substantially. The Industrials closed the day down 347.80 points, or 3.2 percent, the largest closing drop since February 2009, over a year ago. The selling continued Friday, the Industrials falling another 140 points after being down over 200 intraday. The Industrials, S&P 500, and NDX are now all down for the year 2010. If you missed the rally from February, you didn’t miss anything.

There was a lot of chatter from the cheerleaders in the mainstream financial media suggesting that the decline was a computer glitch of some sort, a mistake by a large seller, a fat finger, or a bunch of other nonsense reasons. The truth is, Thursday saw all out selling panic, the fourth 90 percent down day in two weeks, a situation we also saw before the stock market crash of September 2008 through November 2008. We mentioned this warning in Tuesday’s newsletter to subscribers, before Thursday’s debacle. Thursday’s drop was predicted by the stock patterns, and came a day after our DP/SP indicator generated a sell signal, and occurred with our key trend-finder indicator on a sell signal. No surprise, the technical analysis we have been showing in these pages warned of a coming sharp decline. Further, the stock market had strong downside momentum before the 10 minute collapse late Thursday. The Industrials were already down over 300 points before the 2:40 to 2:50 pm EST collapse. Panic selling was already starting before any so-called computer selling technology issues kicked in.

The rest…HERE

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