What an end to a wild and historic week! Yet for all the volatility the indices ended near flat for the week. The Nasdaq finished the week up 0.56% while the S&P 500 was up just 0.27%. In yesterday's watchlist I gave a warning to "be careful out there". Shortly after the open I posted an update which said:
Update @ 9:35 — Seriously, be really careful out there today. I’m seeing all kind of strange spikes both up & down. BBY just spiked up to 80, CMCSA spiked down to 0.01.
That's exactly why I was saying be careful. Panic moves seem to overwhelm the system and strange things happen. My broker IM'ed clients about the exchanges sending bad quotes and many bloggers wrote about having technical issues. While I'm sure the person who sold CMCSA for a penny got their broker to break (invalidate) that trade it would have been better to avoid that situation in the first place. If you have to enter an order in a fast market like that, especially on an open you'd better use a limit order. Anyway, here are some charts with some nutty spikes from yesterday:
Yesterday ORCL was showing a low of $0.01 just like CMCSA. While it appears that the data has been corrected (and the trades broken?) for CMCSA, ORCL is still showing an extreme spike down to $14.56. More unintended consequences brought to you by the Plunge Protection Team (PPT). Hopefully the folks who got hurt on those bad trades will be made whole.
Here are Novell, Franklin Resources and Charles Schwab:
I really don't have much to say about the technical shape of the indices. If I just looked at these charts withough knowing about the PPT actions I'd think yesterday's gap will probably be filled soon. But given the political environment there's little motivation to be a seller -- natural or a short seller. So let's just take it day by day if not hour by hour & see what the market gives us.
The S&P and Nasdaq both stalled at their 50-day moving averages -- right where you'd expect them to hit resistance.
I'm showing SPY here in order to show the true open and the bearish candle that it printed.
Likewise, I'm showing IWM instear of the actual Russell 2000 index in order to show the true open and the bearish candlestick.
A few upgrades today, most notably the "ups" for the small caps.
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Down | Down | Up(+) |
| Intermediate | Down | Lat(+) | Up(+) |
| Short-term | Up(+) | Up(+) | Up |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I'm simply using the indices' relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
are these spikes results out of an error? or was it due to real trades?
Probably a mixture of both.
i don't understand how errors can lead to such high/low spikes..
and yahoo doesn't show these spikes at all. look at the data: http://finance.yahoo.com/q/hp?s=BBY&a=08&b=08&c=2008&d=08&e=20&f=2008&g=d
Somebody probably entered a market order that somehow got routed to a ridiculous bid or ask that some market market had sitting in the market. Maybe the result of some brokerage's overloaded trading system.
There were also reports of bad data coming from some exchanges. So garbage in, garbage out.
Who knows what really happened but we used to see this kind of stuff all the time, especially in extended hours trading. That's why they changed the rules to only allow limit orders in the extended hours sessions.
In answer to Yahoo not showing the spikes. Yes, I know. Some data vendors are better / quicker than others to clean up broken trades / erroneous data.
But the bad data and/or bad trades were there. I saw them in real time. I saw the messages from my broker about bad quotes. You see the charts with spikes yourself.
The point of all of this is use limit orders in fast, wild markets and don't get yourself into the situation where you have to beg your broker to fix an insane fill for you.
From the NY Times ( http://bit.ly/14rrjk ):