Is it possible for the Dow to be at 0?

musicismylife78

I have only a marginal understanding of the stock market, and I know that the other day the dow lost 600 and 700 points.

Seeing as its now at 8,500 is it possible for tomorrow or next week for it to lost 700-800 points and be at 60 or 40 or even 0?

Someone with more understanding of the economy help me out here!

MattyJoe

Not without every company going completely out of business.

musicismylife78

how low will it get do you think

mammasan

radiohead33 wrote:

how low will it get do you think

No one knows how low it can go.

DriftingByTheStorm

radiohead33 wrote:

how low will it get do you think

At this point i'm revising my 7,500 to maybe 6,500.

I honestly think if it went any lower than 6,500 we would see the markets shut down, and we would most likely start to see some serious signs that marshal law was being rolled out.

the saving grace right now is that 90-day commercial paper rates are moving (albeit marginally) back in line with the yield curves, meaning that short term lending to corporations is starting to improve.

However, that being said, this unwind is starting to snowball.
Too much wealth is simply leaving the markets, and it is causing too many large players to in turn have to sell their positions to cover losses, further compounding the losses.

To put it in grim perspective: the DOW isn't ever going to zero, but it could simply go away ... meaning, "sorry, the NYSE is closed until further notice."

i have no idea how long those at the top intend to let this crazy game go on,
but there are plenty of contingencies waiting in the wing that would stop an outright destruction of the market. And FYI the emergency stop on the exchanges is (i think) DOW 1,200 -- meaning if it falls more than 1,200 intraday, they simply halt trading on the floor.

Solat13

As recently as October 2002, the Market was at 7200. Then less than 5 years later it almost doubled.

I don't think it will fall much below the October 2002 level before it goes back up.

MattyJoe

For our society to exist the way it is now, it cannot go to zero. If it ever went to zero it would be the end of the United States, and many other countries. There would be no more business, the government would lose all of its money, and we would lose all of our money. It would be complete chaos.

PJSerf

DriftingByTheStorm wrote:

i have no idea how long those at the top intend to let this crazy game go on,
but there are plenty of contingencies waiting in the wing that would stop an outright destruction of the market. And FYI the emergency stop on the exchanges is (i think) DOW 1,200 -- meaning if it falls more than 1,200 intraday, they simply halt trading on the floor.

It all depends on how big the drop is and the time of the drop. I forget the exact benchmarks, but I think if the market drops 1500 points before noon, trading stops for 1 hour, if its 2000 points, trading stops for 2 hours, etc... There's a chart available on NYSE's website.

Kind of surprising we haven't reached these marks yet....

DriftingByTheStorm

PJSerf wrote:

It all depends on how big the drop is and the time of the drop. I forget the exact benchmarks, but I think if the market drops 1500 points before noon, trading stops for 1 hour, if its 2000 points, trading stops for 2 hours, etc... There's a chart available on NYSE's website.

Kind of surprising we haven't reached these marks yet....

Yeah thanks.
Knew it was somewheres around there, in general.

As for your last remark, man i HOPE we don't get to that point.
1000 point drops are RIDICULOUSLY large.

I'm actually freaking out that we closed down 680.
NOT what i was hoping for.

The markets have tried to move up both today and yesterday (today being first day that short selling was restored) but then failed.

And THAT part is fine.
I would EXPECT that.
Traders testing the markets, trying to pick a early morning low and rally it.
But then getting extremely cold feet given trading conditions lately.

However, the MASSIVE DIVE is NOT a good sign.
I don't know WHAT is contributing so sharply to these late day sell offs.
If i had to guess, it is institutions (hedge funds?) so badly in distress that they MUST take ANY opportunity of ANY sort of rally to ditch massive holding at any sort of elevated levels. Such massive selling is just causing a chain reaction. That is just a guess, but i know volume was ridiculously high today, so?

Oh man, i just don't know.
I'm not saying i didn't expect this kind of think to happen, because i absolutely did. I'm just more suprised at the rapidity with which we went from "everything is fine, don't be a fearmonger" to "So Bob, would you say the world is ending in the next 60 days or what?".

lastexit78

If every company on the board was in debt to the Goverment I would think the market would hit zero. It would actually be in negative territory. Companies would owe more money than they would be worth. Of course at that point it wouldn't matter because a dollar would be worth about 2 cents. It's obviously not going to happen but it's kind of scary to think about the not so far fetched scenarios that could take place.

PJSerf

DriftingByTheStorm wrote:

Yeah thanks.
Knew it was somewheres around there, in general.

As for your last remark, man i HOPE we don't get to that point.
1000 point drops are RIDICULOUSLY large.

I'm actually freaking out that we closed down 680.
NOT what i was hoping for.

The markets have tried to move up both today and yesterday (today being first day that short selling was restored) but then failed.

And THAT part is fine.
I would EXPECT that.
Traders testing the markets, trying to pick a early morning low and rally it.
But then getting extremely cold feet given trading conditions lately.

However, the MASSIVE DIVE is NOT a good sign.
I don't know WHAT is contributing so sharply to these late day sell offs.
If i had to guess, it is institutions (hedge funds?) so badly in distress that they MUST take ANY opportunity of ANY sort of rally to ditch massive holding at any sort of elevated levels. Such massive selling is just causing a chain reaction. That is just a guess, but i know volume was ridiculously high today, so?

Oh man, i just don't know.
I'm not saying i didn't expect this kind of think to happen, because i absolutely did. I'm just more suprised at the rapidity with which we went from "everything is fine, don't be a fearmonger" to "So Bob, would you say the world is ending in the next 60 days or what?".

Its fear and rumors... that's what is driving it...

unsung

MattyJoe wrote:

For our society to exist the way it is now, it cannot go to zero. If it ever went to zero it would be the end of the United States, and many other countries. There would be no more business, the government would lose all of its money, and we would lose all of our money. It would be complete chaos.

I'll bet these tree huggers wish they had their guns at that point.

JOEJOEJOE

Everyone watch "Mad Max" this weekend so you can see what it will be like if the Dow goes to zero.

Speakers

lastexit78 wrote:

If every company on the board was in debt to the Goverment I would think the market would hit zero. It would actually be in negative territory. Companies would owe more money than they would be worth. Of course at that point it wouldn't matter because a dollar would be worth about 2 cents. It's obviously not going to happen but it's kind of scary to think about the not so far fetched scenarios that could take place.

Actually isnt it if all of these companies went out of business, the DOW would be 0?

http://nyjobsource.com/djia.html

MattyJoe

unsung wrote:

I'll bet these tree huggers wish they had their guns at that point.

Fighting Hellfish

PJSerf wrote:

It all depends on how big the drop is and the time of the drop. I forget the exact benchmarks, but I think if the market drops 1500 points before noon, trading stops for 1 hour, if its 2000 points, trading stops for 2 hours, etc... There's a chart available on NYSE's website.

Kind of surprising we haven't reached these marks yet....

I believe the market has to drop 10% for trading to be halted. Also, the Dow is based on an average of 100 companies (I think it's 100, I used to be more up on this). Occassionally, the companies that make up the Dow Jones Industrial Average (More commonly referred to as The Dow) are changed. In the late 90's, technology companies were added, and other companies removed

PJSerf

Fighting Hellfish wrote:

I believe the market has to drop 10% for trading to be halted. Also, the Dow is based on an average of 100 companies (I think it's 100, I used to be more up on this). Occassionally, the companies that make up the Dow Jones Industrial Average (More commonly referred to as The Dow) are changed. In the late 90's, technology companies were added, and other companies removed

Its 50 companies. Here is the chart for when it would halt trading.. this may be based off of 10% when they designed it.

http://www.nyse.com/press/circuit_breakers.html

Heineken Helen

DriftingByTheStorm wrote:

I honestly think if it went any lower than 6,500 we would see the markets shut down, and we would most likely start to see some serious signs that marshal law was being rolled out.

really?

saveuplife

I think we are actually closing in on a bottom now. This is below fundamental prices. It's now an overreaction in the opposite direction. I think it won't fall below 7,500.... but, one can never know.

saveuplife

Just fell below 8,000. This is ridiculous.

PJSerf

saveuplife wrote:

I think we are actually closing in on a bottom now. This is below fundamental prices. It's now an overreaction in the opposite direction. I think it won't fall below 7,500.... but, one can never know.

over-reaction is exactly the right word.