The 1,000 Point Plunge: Death Sentence For The Stock Markets

There is no way out of this. If the 1,000 point plunge was a computer trading glitch or algorithmic trading, as the media still insists today, the system is broken. If it was not, the market is horrible anyway.

If the markets can drop 1,000 points in 30 minutes, imagine how much it can drop on a longer time frame.

Either way, small investors are right in staying away from all this. The system appears rigged. Why would any retail investor put money in the stock market?

As we pointed out yesterday soon after the close, a misplaced trade on PG was not what triggered the sell off. A hedge fund liquidation, that is more possible. A controlled dump to show the politicians what the big banks in the US can do to the market on whim, that is possible too. A trading or computer glitch? I suppose that is possible too.

Any of these options is not good for retail investors.

We continue with our strategy of straddles and oil and natural gas. They are hugely profitable, on paper at least, because I could not cash in as the system froze yesterday afternoon. That is another reason for retail investors to stay away. I should point out that in my registered funds I am 95% money market and 5% gold miners. '

However, this volatility is not going away any time soon. There is Greece and Portugal, Spain, ...

This morning on BNN someone was saying that P/E multiples are extremely attractive. I could not believe it. These people should be jailed.

By the way, our system of buys and sells (not yet released to the public) also indicates those sets of parameters and conditions that have 10% success ratio for buys and sells. These continue to be 100% success after the latest plunge.