The signs of instability and illiquidity were mounting, but we would not have believed it ourselves had we not had a front seat (again). The markets have indeed returned to crisis mode not seen since the collapse of Lehman, and day trading with small stops in heavily leveraged instruments is quixotic. We will, however, publish the report tomorrow on schedule. Unless you are very experienced, it would be wise to lower leverage or stand aside until the markets calm.
spainconsultant
on May 6 2010 at 18:18:36
Oh man, is going to be interesting look at your trade area tomorrow
Just a pitty you live some 6 hours later from Europe………… Europe morning seems is going to be……..puff
Jeff
on May 6 2010 at 20:01:32
Bob,
Wiser words were probably never spoken. I tallied some bad losses and some extraordinary gains. It was the most painful and then most exhilarating trading day I’ve ever experienced. Think I’ll sit in cash tomorrow and just spectate. I need a break after today.
KL
on May 6 2010 at 20:02:57
Bob, we discussed a couple of weeks ago that the market looks vulnerable and it really did show today. Today’s action was a sign that the crisis is not over and that during last year FED managed to build some kind of “fake castle of confidence”. But the market is not back to normal and this means that the risks are high. Since it has been a liquidity rally and not a fundamental one the value buyers are not buying when the market falls therefore the “no floor” action today.
Great call from Bob about liquidity yesterday that was one of the reasons of today’s extraordinary move at some point the bids pretty much disappeared.
Bob English
on May 7 2010 at 07:02:30
@KL: Did you finish your report?
U.S. 10-Year Yields Touch 4-Month Low on European Debt Concern | equity loans
on May 7 2010 at 23:27:14
[...] ES post mortem | The Precision Report [...]
U.S. 10-Year Yields Touch 5-Month Low on European Debt Concern | equity loans
on May 7 2010 at 23:52:43
[...] ES post mortem | The Precision Report [...]