Yesterday was one of the craziest days we have ever witnessed on Wall Street.
The Dow dropped a stunning 1,000 points during a breathtaking 15 minutes of trading on Thursday and we loved every minute of it. The drubbing was so bad that it briefly sent the index below the 10,000 level.
The midday swing of nearly 10% had the bulls doing their best Linda Blair imitation and was a painful reminder that the market often falls faster on the way down then on the way up.
The Dow touched a low of 9,869 but pared its losses to finish with a nasty decline of 348 points, or 3.2%.
The S&P 500 fell below the critical 1,150 level and traded to a low of 1,065 before bouncing back to close at 1,128, a loss of 38 points, or 3.2%
Tech broke down like a rented mule as the Nasdaq fell a staggering 83 points and closed at 2,319, or 3.4% lower. The index fell to a low of 2,185 which was our second wave of support once 2,400 was taken out. However, we thought it would take a few weeks to hit that target, not 15 minutes.
Some of yesterday’s selling pressure was due to ongoing concerns about Greek’s debt but things kicked into overdrive when a trader made a mistake entering an incorrect amount of shares in a Procter & Gamble (PG, $60.75, down $1.41) trade.
We all know the big difference between a million and a billion but that mistake was made and the order triggered a massive sell-off in the stock as it touched a low of $39.37.
Whatever the catalyst, there was fear and panic and Wall Street witnessed its biggest intra-day decline ever. Most investors hate a down market because they don’t know how to make money by shorting stocks or buying put options. We do and we are here to tell you that you can make just as much to the downside as you can to the upside
Bank of America (BAC, $16.28, down $1.25) led the Financial stocks lower as it fell over 7% and was one of the worst performers among the blue chips.
Of course, all sectors were weak except for gold which has surged during the recent turmoil. The Spider Gold Shares (GLD, $118.49, up $3.40) popped 3% and gold stocks such as Barrick Gold (ABX, $436.68, up $0.80), Newmont Mining (NEM, $54.64, up $1.12) and Goldcorp (GG, $43.40, up $0.74) each added 2% for the day.
Things are looking better this morning as the bulls got a great nonfarm payroll number. Futures soared after the initial report showed 290,000 were added, the most in four years. The jobless rate rose to 9.9% as more people started looking for work
The market will likely get a relief rally at the open but we doubt a lot of investors are going long before the weekend. As we head to press, Dow futures are up 66 points to 10,523 while the S&P 500 futures are higher by 9 to 1,131. The Nasdaq 100 futures are showing a gain of 11 points and are 1,897.
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