Is it possible for the Dow to be at 0?
musicismylife78
Posts: 6,116
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!
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!
Post edited by Unknown User on
0
Comments
-Reagan
No one knows how low it can go.
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.
If I opened it now would you not understand?
I don't think it will fall much below the October 2002 level before it goes back up.
- 8/28/98
- 9/2/00
- 4/28/03, 5/3/03, 7/3/03, 7/5/03, 7/6/03, 7/9/03, 7/11/03, 7/12/03, 7/14/03
- 9/28/04, 9/29/04, 10/1/04, 10/2/04
- 9/11/05, 9/12/05, 9/13/05, 9/30/05, 10/1/05, 10/3/05
- 5/12/06, 5/13/06, 5/27/06, 5/28/06, 5/30/06, 6/1/06, 6/3/06, 6/23/06, 7/22/06, 7/23/06, 12/2/06, 12/9/06
- 8/2/07, 8/5/07
- 6/19/08, 6/20/08, 6/22/08, 6/24/08, 6/25/08, 6/27/08, 6/28/08, 6/30/08, 7/1/08
- 8/23/09, 8/24/09, 9/21/09, 9/22/09, 10/27/09, 10/28/09, 10/30/09, 10/31/09
- 5/15/10, 5/17/10, 5/18/10, 5/20/10, 5/21/10, 10/23/10, 10/24/10
- 9/11/11, 9/12/11
- 10/18/13, 10/21/13, 10/22/13, 11/30/13, 12/4/13
-Reagan
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?".
If I opened it now would you not understand?
Its fear and rumors... that's what is driving it...
I'll bet these tree huggers wish they had their guns at that point.
Actually isnt it if all of these companies went out of business, the DOW would be 0?
http://nyjobsource.com/djia.html
-Reagan
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
Verona??? it's all surmountable
Dublin 23.08.06 "The beauty of Ireland, right there!"
Wembley? We all believe!
Copenhagen?? your light made us stars
Chicago 07? And love
What a different life
Had I not found this love with you
over-reaction is exactly the right word.
Thats why i think if it gets to 6,500 we start to see some serious physical symptoms (like cops in the street) ...
7,500 SHOULD be a bottom on fundamentals. But Funny-mentals don't get you much in markets like this.
And if credit markets don't get right soon, it isn't going to matter what "real" value is.
[anyone know which way LIBOR moved yesterday? I never checked]
In any event, the market has been showing signs of intermittent selling exhaustion since wednesday.
If today can keep to less than a 300 pt loss at close, i would be willing to start thinking more seriously about a bottom. If it closes less than 100 points down, more so.
700 point early plunge followed by a rally is actually an exceedingly GOOD sing. It's what traders have been waiting for all week.
Lets see where this goes in to close, and lets remember that ANY bad news coming out in fundamentals could wipe this all off the table by next week.
:fingers crossed:
If I opened it now would you not understand?
See, I don't necessarily agree. IMO fundamentals are not that low. I think that we are witnessing a downswing (overreaction), which is similar to a bubble except in the other direction. Therefore, IMHO, right now the fundamental price is actually higher than the actual. That's why I think we all agree things will "eventually" turn around. Because it needs to come back to the fundamental.
Regardless, of what we disagree about with the "low point", I think we can agree... this blows.
I do totally agree with you about credit markets. Well, I like looking at the TED spread rather than just LIBOR.... I'm almost positive that increased again yesterday.... unfortunately.
A friend of mine who works for Bear Sterns told me last night over drinks that he expects the market to go as far down as it went up. He stated that if it can be kept above 8000 for a few days then thinks will start to slowly creep upwards, but if it falls under 8000 we could see a panic like never before.
It went below 8000 today, and then jumped right back up. Does he mean close below 8000?
I kinda agree with him, except my level is 7500 and I would need to see a close below that level... not just a brief moment below that level in a day.
Yes he meant close below 8000. He stated that a close that low would have a devastating ripple effect across foreign markets. Which would in turn cause our market to drop even lowers creating a really bad cycle. He stated that the US markets where the only one's that could reverse this course. Most foreign markets are simply reacting to our downward spiral. If we can't level it off or pull it up then no one else will.
100% agreed. And I think we "may" see that today. It was a very good sign that things bounced right back after hitting 8000 IMO.
Let's hope so I really don't want to see what happens if the market drops again like it did yesterday.
I'm hoping we get through the day. With Monday being a bank holiday, activity will be lighter than most, and I'm hoping Tuesday brings a bounce back.
Well so far the market is down 373 points. It's still early enough to chance course but it seems that after the morning bounce it just started to slide again. If the market is going to close under 8000 today would be the best day for it to happen. With a three day break in trading it will give people time to cool off. Hopefully it doesn't happen on Tuesday.