Market continues to tumble into close post Citi fiasco

Posted by Mark Pszeniczny on May 7, 2010 8:29:00 PM

After yesterdays amazing post close circus, today started out rather mild. For those of you who didn’t hear, a fat finger mistake by a former Citi trader… (as of 3:05pm yesterday he is a former employee) who put a trade in for several billion rather than million shares, sent the market into near collapse in minutes. Heat went from -.0705 to -.1250 in about 4 minutes. As things resolved themselves and world indices came back to reality, some of the fear carried over into todays session. The mere conjecture that $40 stocks can go to $0 in minutes had some traders getting out of Dodge and booking profits. While the panic does not suggest that markets can collapse instantly, it does point to the fact that there are a lot of stop limits out there in all markets which suggest a continued overbought mentality. With the jobless report showing employers adding jobs but the jobless rate grew to 9.9% (don’t ask, I’m just as confused) that held prices down for the remainder of the day. Heat still was able to bounce off the 61% retracement as it did during the panic sell off yesterday, so that 2.05 area looks tough to break. With the daily chart the last few weeks looking much like my recent EKG, its impossible to tell where we are headed in the near term. What we can say is that this was a much needed correction and a fourth down day should confirm a new trend. At the close, Crude fell $2.00 to $75.11, RBOB lost .0312 to $2.1251 and HEAT slipped .0342 to $2.0795

Topics: Jobless claims rise, The Market, Profit taking

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