Google ‘flash crash’ on Friday another stock market warning?
Posted on 26 September 2010 with 3 comments from readers
Google stock dropped more than 90 per cent in a spectacular mini ‘flash crash’ on Friday that may just turn out to be a technical error or something far more significant. The video below tells the story (which we cannot confirm as true although it looks solid).
The May 6th ‘flash crash’ when the Dow lost almost 1,000 points in a matter of minutes comes instantly to mind (graph above). The US stock market has staged a long rally from its March 2009 low but the head-and-shoulders pattern over the summer is consistent with a major top and trend reversal.
Market warning?
Market observers have been looking for a signal since the May ‘flash crash’ that the market is rolling over. We have had warnings from financial astrologers and three confirmations of the Hindenburg Omen in the charts.
Perhaps the Google ‘flash crash’ is that final warning. Something probably caused it, and that something probably had to do with market makers repositioning for a correction. Conspiracy theorists will love this but it might just be too late already to short the market if this warning is validated.
3 Comments posted by readers:
It makes me wonder if those big math wizards on Wall Street have ever watched the movie ‘War Games’ (1983, MGM)? I mean, what could possibly go wrong when you let automatic computer programs instantly trade 70% of the daily stock market volume?
Speaking of computers, on Monday, Sept 27, in Washington, the National Press Club will host a former US Air Force officer who will describe how a UFO shut down his 10 Minuteman missiles. AOL did a story on him yesterday. So expect some other big news event to break on Monday.
Maybe the ultra complex computer worm that targets nuclear infrastructure in Iran will strike, if it hasn’t already. I would love to know how the worm authors stole the authentication code from the Taiwanese office park. James Bond stuff for real. I’ll bet Siemens has hired some more detectives to ask a lot of questions.
While writing a comment about it for the NYT, my broadband connection went down. It is still messed up. Coincidences happen, so expect more flash crashes. Be careful with stop loss limits. You can lose a lot in a flash crash, if your good stock gets automatically sold during a machine induced drop. Do you suppose some people might have found a way to do it on purpose? Probably not.
No doubt, the US stock market is in serious trouble; the daily and extensive market manipulations by the FED ( & JPM, GS, et al) are only exacerbating this serious problem. There are some reputable “experts” and Hedge Fund managers who claim that between now and next Spring, the market will skyrocket . . . while equally reputable “experts” claim just the opposite.
So one thing should be very clear to the small investor : exercise extreme caution here!
An Update on the “Massively Destructive Virus”:
For those who may not know, on 23Sep, the Internet was bombarded by an extremely sophisticated computer virus which was deliberately designed by a nation-state to take out “some” very high value target. Go here for info:
http://www.zerohedge.com/article/deadf007-stuxnet-secret-weapon-attack-irans-nukes-virus-about-revolutionize-modern-warfare
On 24Sep, computer experts determined that this virus was launched in Israel, and was seeking (or had sought out!) a target in Iran. Go here for info: http://www.zerohedge.com/article/security-expert-suggests-stuxnet-originated-israel
On 25Sep, Iran had admitted that several of its facilities had been attacked, and Al-Jazeera confirmed that not only had Iran’s Bushehr nuclear reactor been infected, but numerous other industrial sites in Iran as well. Go here for info:
http://www.zerohedge.com/article/al-jazeera-confirms-iran-nuclear-and-industrial-sites-crippled-stuxnet
This is Very Dangerous:
If these allegations are found to be true, then our world has just entered a new and dangerous phase of global cyber-warfare. Unless there has been some “official” declaration of war, what right does any nation-state have, when they attempt to destroy another nation-state? Pearl Harbor in December 1941 comes to mind here, but even that event was not un-foreseen, since the US was blockading the country of Japan prior to December 1941.
Obviously, this event will have significant negative repercussions for a long, long time . . .
So which was it – technical error or something more significant? When do we get the follow-up?
Ed Note: The fall in US markets last night was the follow up.