By noon the market had partially recovered their heavy losses at the opening (@ 9:30 DOW off 1,100 / -6%) to a more manageable down one percentage point. Savvy investors are not surprised at today's volatility which occurs after large moves and some made nice profits. WTI oil fell to a low not seen since February 2009, $37.79, the U.S. dollar rebounded from a mid $92 2004/2005 double top support, deemed important.
This decline is being blamed on everything from China's weakening economy to politicians dirty diapers. The guessing game continues where investors stand.
Here is the current market situation from CNN Money
North and South American markets are sharply lower today with shares in Mexico off the most. The IPC is down 3.35% while U.S.'s S&P 500 is off 1.44% and Brazil's Bovespa is lower by 1.07%.
The $VIX shot up to 50 where investors were in an all-out selling frenzy then dropped back to 30 to where this is the toughest range to gauge as there isn't really a clear signal to what is going to happen next.
World stock markets fell sharply again as panic selling in China has picked right back up to start the week. China's stock markets have now wiped out the gains built up during the year. The Shanghai Composite Index closed down 8.5% after the lack of an official policy move from Beijing increased the level of anxiety. Many index futures contracts in China fell by their 10% limit in an indication more selling could unwind.
The 'Sheeples' were shocked by almost a mini market crash, what certainly looked like a very serious situation, to them at least. The good news is indicators show a very serious oversold condition which has to be relieved and savvy investors are now reviewing the odds of a near-term market reversal.
Many industry watchers believe market prices will continue their fall even further as OPEC producers continue to pour out more oil than needed and fueling the glut. The so-called 'correction' is believed my many to be the start of a full blown market descent and not likely to return to the previous highs for several years. In other words, the bear market has started with earnest.
$NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages.
NEW YORK (AP) — Well, that was fun while it lasted. For years, investors in U.S. stocks shrugged off threats — a government shutdown, fear of a euro collapse, a near U.S. debt default — and just kept on buying.
At the sixth anniversary of the bull market in March, the Standard and Poor's 500 index had more than tripled in value. Now, buyers are hard to find. A wave of selling has hammered major indexes, with the S&P 500 losing nearly 6 percent last week.
That was its worst weekly slump since 2011. U.S. stock futures Monday are indicating another steep decline that could pull the index into what Wall Street calls a "correction," or a fall of 10 percent from a recent high.
Corrections are natural in a bull market, a pause in the market's march higher, and this one is long overdue. They usually come about once every 18 months. The last one was four years ago.
BEIJING (AP) — China's stock market fell Monday by its biggest margin in eight years, defying the government's multibillion-dollar effort to stop a slide that has wiped out the gains of this year's price boom.
The decline threatened to weigh anew on global markets after last week's Chinese losses triggered a worldwide selloff. The benchmark Shanghai Composite Index fell 8.5 percent to close at 3,209.91 points, its biggest one-day loss since an 8.8 percent decline on Feb. 27, 2007. T
he index is down 38 percent from its June 12 peak and just under 1 percent below its closing on Dec. 31, last year's final trading day. "A disastrous result for China, after working so hard to breathe life back into domestic equities after the 2007 crash and having spent hundreds of billions of dollars propping up the market since June," said Angus Nicholson of IG Markets in a report.
(Reuters) - Apple Inc's China business experienced "strong growth" in July and August, Chief Executive Tim Cook told CNBC on Monday, seeking to assuage investor concerns over the company's prospects in a market considered critical for its growth.
(Reuters) - U.S. stocks staged a dramatic recovery off their lows on Monday, helped by a turnaround in Apple's shares, but the three main indexes remained in or within spitting distance of correction territory amid fears China's growth is slowing.
During the flash crash of May 6, 2010, the 1000 plunge in the Dow Jones seems historic, unprecedented and surely unrepeatable - after all the regulators had "learned their lesson" and would never allow a move like this ever again, right? Wrong.
Ever since Kazakhstan stormed onto the radar of market participants who, prior to last week, didn't know the country existed, the world has awoken to the fact that a sharp and persistent decline in oil, that most financialized of commodities, comes with very real and far-reaching consequences.
For producers, crude's slide strains budgets and pressures FX reserves and as we documented at length on Sunday in "Saudi Arabia Faces Another 'Very Scary Moment' As Economy, FX Regime Face Crude Reality," nowhere is this more apparent than in Saudi Arabia where the country faces a fiscal deficit on the order of 20% and the first current account deficit in a decade.
The situation has some betting that Saudi Arabia will not be willing (or able) to retain the riyal's peg to the dollar and as you can see from the 12-month forwards, it might be time for sellside FX strategists to reconsider their position that the currency regime isn't likely to change anytime soon.
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
After losing 11% last week, Shanghai this morning was down almost -9% at one point, after lunch went back up to -6.5%, and ended its day at -8.49%. A Black Monday for sure, but is this the BIG ONE? It really doesn't matter one bit. Unless perhaps you persist in calling your self an investor, in which case we pity you, but not for losing your shirt. Because God knows we've said enough times now that there are no functioning markets anymore, and therefore no-one who can rightfully lay claim to the title 'investor'.
Plenty amongst you will be talking about economic cycles, and opportunities, and debate how to 'play' the crash, but all this is useless if and when a market doesn't function. And just about all markets in the richer part of the world stopped functioning when central banks started buying assets. That's when you stopped being investors. And when market strategies stopped making sense.
Central banks will come up with more, much more, 'stimulus', but what China teaches us today is that we're woefully close to the moment when central banks will lose the faith and trust of everyone. After injecting tens of billions of dollars in markets, which thereby ceased to function, the global economy is in a bigger mess then it was prior to QE. The whole thing is one big bubble now, and we know what invariably happens to those.
More QE is not an answer. And there is no other answer left either. Those tens of trillions will need to vanish from the global economy before any market can be returned to a functioning one, and by that time of course asset prices will be fraction of what they ...
Curious why few if any traders can actually execute any trades, whether buys or sells? The reason is that despite the relative calmness of the index prints, what is going on beneath the surface is an unprecedented wave of constant halt and unhalts as all stop levels were taken out, many in circuit breaker territory, making it virtually impossible for any matching enginge to, well, match buyers and sellers.
Here is a sample:
The resulting halts made it impossible for regular traders to step in, requiring central banks to buy via the CME's Central Bank Incentive Program, to restore some market stability.
And just to add to the pain, there is absolutely no liquidity in either stocks...
eMini Liquidity since 2009 - today is the black line $ES_F pic.twitter.com/2vsXJWxdNI
â€" Eric Scott Hunsader (@nanexllc) August 24, 2015
... Or bonds:
Treasury Liquidity (10-year) is as low as it was during Treasury Flash Crash of Oct 15: pic.twitter.com/oZx2nH7vmK
â€" Eric Scott Hunsader (@nanexllc) August 24, 2015
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