Friday, October 24, 2008

Stock Markets Crashing

It's 8am this Friday and after a healthy market bounce yesterday (400pt Dow bounce from the lows), we awaken to a global stock market panic. US stock futures are lock-limit-down. The Dow -550 pts , S&P 500 -60 pts, and the NASDAQ -85 pts.

European stock markets posted hefty losses. At 6:36 a.m. the FTSE 100 Index was down 277 points, or 6.8 percent, to 3811 on the London Stock Exchange. The Dax Index dropped 375 points, or 8.3 percent, to 4145 on the Frankfort Stock Exchange.

Overnight, the Nikkei 225 tumbled 812 points, or 9.6 percent, to 7649 on the Tokyo Stock Exchange.

I would say that I am net long for sure now. Long some oil stocks, long some gold stocks, long DELL, short Treasuries, and long the NASDAQ-100 which I bought just yesterday.

Since I got in the near low on Thursday, QQQQ at 29.04, despite the violent drop right now, I am not down too much on my trade. QQQQ is 28.59 at the moment. Nonetheless, I am pissed. Should have dumped it yesterday afternoon so I could reload here.

Today is going to be a crazy day. I bet we either totally crash (1,000 pts down?) or finish up 500pts. I doubt I'll be doing much either way.

I just covered my long term disinvestment in HSBC Bank. Shorted it at $71 in February; rode it up to $87; and now just bought it back at 53.74 in the pre-market.

UPDATE - The Dow futures looked like they opened down near 700 at 9:30am. Right now (9:34am) they are down 582 pts. I actually bought more QQQQ at 28.39. I felt like I am net long, but my P&L had me essentially flat on a 6% gap down opening. So I figured I needed to buy some more. I am going to have to close my brokerage window now because it's flickering so fast my computer is going to seize up.

UPDATE - The Dow rallied (?) much of the day after its ominous opening. It rallied near to unchanged (down 100?) before finishing the day off 312 pts. I wasn't really watching as I was out all day trying to give my wife some space for her conference calls and I also had to pick up my brother from the airport. I just did get back to my PC at 3:20pm.

At 3:53pm my kibitzing wife persuaded me to dump the QQQQ I bought this morning at 28.39. I sold it at 30.00. A mere twelve minutes later I re-bought it 29.15! In contradistinction to yesterday, the market really got clipped on the close. There must have been a lot of (forced?) mutual fund redemptions today.

QQQQ right back up to 29.40. This ain't good for Mrs. C-Nut's little ego.


Anonymous said...

I wonder how much of the "panic selling" can be traced to the media's panicked coverage... I was reading this blog earlier and they seem to point to this as an issue:

CaptiousNut said...

I won't lay this one on Big Media.

Volatility is worse in commodity markets with no media coverage and little public involvement.

I think the public is increasingly tuning it out anyway.