Dow Dropping Fast, dont buy the China Stock

Originally posted by ben91069
What is the cause of this?

Just a guess, but it could have something to do with this:

www.abovetopsecret.com...

Edit: shrunkensimon, no, it's not just you!


[edit on 27-2-2007 by Benevolent Heretic]

It isn't a crash. It is still above 12,000. Let's just hope there isn't a bunch of selling or moving equity into bonds.

It's so chaotic that level 2 displays can't even keep up with it. JBLU is trading at 12.33 x 12.34 as I type yet the l2 shows a spread of 12.32 x 12.17.

500 points on Dow Jones lost. Just finding that out.

It's due to the Chinese market banning a lot of US imports, such as peanut butter....

That's why choosy moms choose Jif!!

it has pulled back from the 500 mark. now at about 380 deltaboy

My sister works at T Rowe Price and said people's jaws dropped at 2:50 along with that nice plunge. Isn't speculation, reaction and automated trading a great combination?

to quote my old man, "you spend a year making a hundred grand and in the blink of an eye you lose two"

yep fell again near the end to -415. amazing few minutes where around an hour or two ago, it dropped 250 points.

speculation can be a killer in that market or what.

[edit on 2/27/2007 by andy1033]

looks like the proverbial dad count bounce.

it's going to be an interesting tuesday

Originally posted by Rockpuck
...the Gold market has fallen significantly today.. which is odd I would think it would rise with people moving money from stocks to metals.

that caught my eye too.
i would have thought people would have gone to gold.

can anyone explain that?

There is concern that China is going to increase interest rates and set rules on limitation on stock. The reason for this is because China is growing at such a fast rate that many fear the economy will burn out, the Chinese government are now trying methods to cool it.

And thats why the World markets have took a dive

[edit on 27-2-2007 by infinite]

Errrrmmm perhaps it has something to do with the news reports from Iraq where the US troops found a cache of weapons and said they are by the markings tied / supplied by Iran ???

Just a thought on what may it may be, but with these kinda stories then I reckon all the major markets are gonna see a downslide apart from the arms companies, anyone checked their share prices out ??


P.S. where I said the US troops found a cache of weapons supplied by Iran I meant to add "supposedly supplied by Iran", after the WMD debacle what can you believe.

its been reported in the media why and i have just said. its fears to do with China and you have take into account about the mine industry has taken a huge hit by some news in South Africa.

it has nothing to do with Iraq, its Chinese economy fears and South Africa

I don't buy the China excuse.

It's amazing how many people (even on ATS) are so willing to immediately buy the mainstream media's explanation of an event.

Why would a proposed rule change in one national market set off a domino effect in other national markets? Is (let's say) GM or Microsoft worth less because China wants to curb speculation? Of course not.

Something else is going on.

My bet is something blew-up in the derivatives market.

If you don't know what I'm talking about, see this post on derivatives.
.

see my first post.

combination of events including a supposed attack meant to harm cheney, the chinese gov't fueled crash, the goods decrease, Greenspan's recession warning etc.

Originally posted by Gools
It's amazing how many people (even on ATS) are so willing to immediately buy the mainstream media's explanation of an event.

ermmm...maybe cause everything is not a conspiracy?

China has heavy investment, including the likes of Microsoft, so economic change is doing to have a huge effect of them and that nations that trade with them. the likely hood is most things in your home were "made in china"

there is only one other theory that is possible and that could be China testing its economic strength, remember the old saying about America catching the cold? maybe China is testing to see how the World reacts.

think about it, you are about to be the Worlds biggest economy, how do you test your influence?

Too much debt out there. The Chinese started pulling back. Be happy if you're into bonds for the next couple of days.

By Friday, Monday at the latest, things will be back to normal.

Having worked as an analyst many years ago, the behaviour is worrying of the Dow Jones.

Taking a look at the technical analysis...
Today, each fall has been followed by a "Dead Cat Bounce" recovery that is repeatedly less than a 50% retracement, and, frankly closer to the lame 1/3 recovery. There is clearly no strength left in the market which has been forming a upturned bowl formation for several months. Catastrophe is likely in the very near term, probably before the weekend.

Taking a look at the fundamental analysis...
In 1987, one such event that turned a steep decline into an all-out crash was the attack on Black Monday by the US on an Iranian oil rig. The view of brokers was "well, that's it, they've started shooting - SELL". The same holds true now and the slightest incident will trigger a heavy sell-off if the markets view that war is imminent. As far as the general fundamentals are concerned, it is as black as black can be. Traditionally, the markets view that old industries have a Price to Erning Ratio (P/E) of about 9 and high flying companies have one of about 18 maximum. The AVERAGE of the Dow Jones is now about 25. This is a figure roughly the same as saying, cure for cancer is certain in the next few days, warp drive the week after, 50 new oilfields the size of Alaska by the end of the month. In short, the whole market is one vast, scarey speculative bubble, with an index that is walking on air. And the real economy, as black as the Signus X-1 Black Hole. Huge deficits, nothing to cover it, industry retooled to serve a vast unweildy military that is not happy to continue the fight and its all base on obscene levels of debt that would have made Enron look like a winner. Furthermore, with all of America's enemies and competitors holding the debt, like China, it has become the "Yellow Man's Burden" and one which they will be only too happy to offload as soonas possible.

Advice? Consult your broker or financial consultant, assuming that you can talk him down off the ledge, and start buying PUT options or, as a last resort, start placing $10 bets with "Paddypower", so when it does crash, you'll have enough cash-in-hand to hold out through the long, dark, irradiated nights of the 1930's style depression that is certain to follow.

(...Incidentally, I have in the above assumed that there will be NO ATTACK on Iran. Should this happen, then the view would be far less rosey for AMerica and worse a few hundred fold.)

Originally posted by infinite
think about it, you are about to be the Worlds biggest economy, how do you test your influence?

by intentionally losing hundreds of millions of dollars?

no, the gov't was afraid that the economy was moving too fast and fears that they would step in to curb the rapid growth caused a pull out by investors. that pull out pushes prices down. the drop in prices scares the public and they pull out pushing the markets down further. now the americans wake up and start trading and see that the hottest markets, where a big chunk of investments are currently sitting has dropped 10% or so and a our markets react accordingly, with a drop. The goods report comes out, it sucks. confidence in our markets drops. Cheney gets attacked. confidence in our country drops and is reflected in a drop in the markets again. people start to panic and sell to avoid losing more money

the spiral worsens.


vultures, seeing a 500 point drop decide to buy in. the market rebounds. it bounces back 150 or so points. the vultures sell and take their profits, the market turns down again.


ouch


it will be rocky for a few days. margin calls, taxes triggering selling etc but