The Forgotten Flash Crash - One Year later
Gary Dorsch (Global Money Trends) submits:
One year ago, few traders were expecting a pullback of any significant degree, with the Dow Jones Industrial perched above the 11,000-level. Traders had become complacent after a year-long advance during which the Dow Industrials had risen +70% above its bear market low, while retreating only twice for minor pullbacks. Traders stopped thinking about potential dangers and started believing the risk of another bear market had vanished.
Yet simmering beneath the surface was the specter of a sovereign debt default rivaling the size of Lehman Brothers’, and threatening the world economy with a “double-dip” recession.
The May 6th, 2010 “Flash Crash,” carries the distinction of the second largest point swing, 1,010-points, and the biggest one-day point decline, of 998.5-points, on an intraday basis in the 114-year history of the Dow Jones Industrial Average. Crashes can occur during bear or bull markets, and are characterized by panic selling and abrupt, dramaticComplete Story »