SPX 1-Minute and 5-Minute Charts; S&P 500 FLASH CRASH ON 2/5/18

The SPX flash crashes on Monday, 2/5/18. At 3PM EST, the S&P 500 flushes -2% in 7 minutes and then recovers +2% in 7 minutes. The epic and historic market action leading into the flash crash event  is chronicled below.

At lunchtime on 2/5/18, after the European close, stocks roll over to the downside and begin accelerating lower. Boom, Both the SPX and INDU take out the days lows. That spells trouble. The machines are becoming more aggressive with the sell programs. There is another serious selling event underway in the stock market.

SPX 2738. INDU 25255. COMPQ 7197. RUT 1533. VIX 18.98.

Euro 1.2408. Euro/yen 136.50. Dollar/yen 110.01. Pound 1.401. Euro/pound 0.8857. Indian rupee 64.07. Mexican peso 18.6217. Canadian dollar 1.2499. Dollar/yuan 6.2926. USD 89.51.

Treasury yields are; 2-year 2.12%, 5-year 2.56%, 10-year 2.84%, 30-year 3.11%. The 2-10 spread is at 71.6 bips.

WTIC oil 64.666. Brent 67.99. Natty 2.75. Gold 1336. Silver 16.77. Copper 3.2275.

The SPX collapses to 2723. Boom. The S&P 500 is down 149 points off the record top at 2873 on 1/26/18 a -5.2% drop. After 402 trading days, the SPX finally makes a -5% correction. This is the longest streak in stock market history.

At 1:25 PM EST, the Dow is crashing 415 points to 25102. The SPX sinks 39 points, -1.4%, to 2722. LOD 2720.

The COMPQ drops 75 points, -1%, to 7165. The RUT is down 22 points, -1.4%, to 1524. Whoa. Look out below. The VIX catapults higher to 22.07. Equities are in free fall. The Dow is down 455 points in collapse.

Defense stocks are punished. ITA -2.3%. BA -1.8%. UTX -2.5%. LMT -1.6%. GD -1.666%. Energy stocks collapse. XLE -2.9%. Banks are bludgeoned. XLF -2.3%. KRE -1.7%. Industrials, chips, biotech and consumer staples all fall down the rabbit hole. XLI -1.5%. SOX -1.4%. IBB -2.1%. XLP -1.5%.

The weakness in semiconductors is taking stocks lower. SOX -2%. Equities are trailing steadily lower in programmed trading. The robots are taking price steadily downwards in a straight line. The computer algorithms are executing steady sell programs. The trend lower is orderly.

Bitcoin flash crashes -20% to 6583 well under the 7K level at lows not seen since November. Ethereum crashes -14% to 712. Ripple loses -11% to 0.727. The cybercurrency arena is a mess.

All 30 stocks in the Dow Industrials are negative. BA -5.7%. XOM -5.7%. MMM -5.6%. HD -5.6%. UTX -5.5%.

At 2:50 PM, the S&P 500 falls to 2700 hesitating at this key psychological level. Boom. It fails. The SPX stumbles at 2685-2695 a few minutes and then flash crashes. The bottom falls out of the stock market. Jaws drop.At 3:05 PM, The SPX plummets 82 points, -2.9%, to 2679. Investors are panicking. Stocks are in free fall with a flash crash occurring. The Dow drops 911 points, -3.6%, to 24619. The COMPQ collapses 169 points, -2.3%, to 7074. The RUT plummets 42 points, -2.7%, to 1505.

VIX jumps to 29.83. Humorously, three different analysts proclaimed this morning that there is nothing to worry about unless the VIX climbs above the 22 to 25 area. That trio of Einstein’s are likely part of the group that is now panicking.

At 3:07 PM, the Dow is down 1028 points, -4%, to 24468. Wow. The S&P 500 is down 96 huge points, -3.5%, to 2666. Equities are crashing.

The Nasdaq Composite is down 196 points, -2.7%, to 7044. WTIC oil is down -2.6% to 63.75. Brent oil is down -1.8% to 67.33. Natural gas is down -3.4% to 2.75. Gold is up 6 bucks to 1339. Silver 16.75. Copper 3.2055.

At 3:09 PM, the VIX spikes to 34.07. Stocks are crashing dropping faster than the numbers can be recorded. The SPX is down 105 points, -3.9%, to 2655. The Dow drops 1215 points, -4.8%, to 24290. The COMPQ loses 229 points, -3.2%, to 7013.

Wow. Markets are crashing. It is amazing to see in real-time. The numbers are dropping in big block increments. It is a full-fledged flash crash. Each time you blink the numbers drastically change for the worse.

The S&P 500 is down 121 points, -4.3%, to 2641. INDU is down 1507 points, -5.9%, to 24004. The Dow is down -6% and about to lose the 24K level! The Dow was above 26600 only six days ago! That is a 2600 point drop!

The COMPQ loses 256 points, -3.5%, to 6983. The RUT drops 51 points, -3.3%, to 1495.

The flash crash event ends and stocks recover with an intraday sharp V bottom. At the low, the Dow Jones Industrial are down 1597 points, -6.3%, the largest point drop since September 2008 when markets were crashing during the financial crisis and the largest point drop in the history of the stock market. It takes your breath away. The Dow is down 1600 points in one day.

Trading volume is heavy at 50% to 150% above the 30-day average. In other words, equities are dumped with volume at double and triple a day’s normal volume. Stocks are being tossed into the garbage with reckless abandon. No doubt margin calls are hitting investors and they are selling anything they can to raise funds. One trader cannot take the pressure and jumps out the window. Fortunately, he was on the ground floor.

The flash crash started at 3:03 PM at SPX 2693. The S&P 500 crashes to 2638 at 3:10 PM a -2% drop in 7 minutes and then immediately flash spikes back to 2695 at 3:17 PM a +2.2% gain in 7 minutes.

At 3:20 PM, the SPX is down 89 points, -3.2%, at 2672. The Dow is down 1060 points, -4.2%, to 24464 under 24.5K. The Nasdaq Composite slips 187 points, -2.6%, to 7056. The Russell 2000 is down 41 points, -2.666%, to 1506.

XLF -4.1%. XLE -4.2%. XLV -3.7%. XLI -3.2%.

The VIX is above 34 at 34.02 the highest level since September 2015.

At 3:30 PM, SPX 2691. INDU 24696. COMPQ 7088. RUT 1513. VIX 30.59.

Bitcoin crashes -12.2% to 7216. Ethereum crashes -12% to 729. Ripple crashes -11.3% to 7236. Bitcoin cash crashes -19% to 934.

Treasury yields are; 2-year 2.07%, 5-year 2.50%, 10-year 2.77%, 30-year 3.04%. The 2-10 spread is 68.9 bips.

There are 10 decliners to every 1 advancer but interestingly, in Friday’s selloff which was not as bad as today, there were 12 decliners for every 1 advancer.

XLE -4.1%. XOP -3.2%. XAL -2.5%. BA -4.5%. VOX -2.4%. VNQ -1.7%. MMM -3.7%. KRE -3.4%. XLF -3.8%. XLV -3.3%. UNH -4%. IBB -2.7%. XLU -1%. XLI -3.1%. CAT -3.4%. XLP -2.6%. XHB -2.4%. XLRE -1.5%. SX -3.1%. XLK -2.5%. XRT -2.3%. XLB -2.7%. TRAN -2.7%.

At 3:42 PM, stocks remain weak. SPX 2674. INDU 24566.60. COMPQ 7057. RUT 1508. VIX 31.57.

The computer screens are bleeding blood red but market pundits remain bullish on the stock market.

As stocks collapse, television pundits proclaim, “Let’s take a longer view,” also “don’t forget you are an investor for the long-term” and the ever-popular talking point “it’s a buying opportunity.” These are all the things said after your short-term trade blows up in your face. The old Wall Street adage asks, “What is a long-term investor?” Humorously, it is a short-term investor whose trade went the wrong way.

Indiscriminate selling is taking place. No doubt that many retail investors are running for their lives thinking the stock market was a dream but instead it turns into a frightening nightmare. Young folks that chased into stocks this year are losing about -10% across the board the last few days. Welcome to the stock market. You will learn that those making the money on Wall Street are the insider traders that know how the game ends ahead of time. The daily charts show distribution days over the last month where the smart money was sluffing off shares to the dumb money that now serves as the bagholding sucka’s.

There is $3.2 billion in stock lined up to sell into the closing bell. This is off-the-charts ugly. It will sink the indexes into the bell although many of the trades will be pared off in the coming minutes. The selling event is historic.

Those crazy short volatility ETF’s are blowing up. Novice traders in these dangerous instruments are being taken out on stretchers. XIV crashes -14%. SVXY -32%. The long-volatility plays catapult higher. UVXY +66%. VXX +33%. Smart investors know to stay away from these flawed volatility instruments.

Several trading platforms and websites go down including T Rowe Price, Fidelity, E-Trade, Vanguard and others. The robo-advisor websites such as Wealthfront and Betterment are in an outage unable to handle the traffic and data load. Lots of people are trying to gain access to account to find out how much money they are losing.

The day is wild with the partial Euronext outage this morning, the loss of fund platforms this afternoon and of course the flash crash in the stock market. History is written in real-time as the blood flows in the streets.

After several failed restarts this morning, the Euronext platform resumed trading in the CAC40 futures, commodities and AEX-related futures. The partial Euronext outage lasted about four hours. The computer systems are being tested today.

Over $1.5 trillion in market value is lost over the last couple days. President Trump will have to revise his talking points when he brags about all the wealth he created in the United States over the last year.

At 3:50 PM, the SPX is down -3.4% to 2666. The Dow sinks -3.9% to 24534. The Nasdaq Composite loses -3.1% to 7014. The RUT is down 50 points, -3.2%, to 1497. The Russell is testing the low of the day at 1495. Hold on tight.

At 3:54 PM, the Dow is down 1106 points, -4.4%, to 24409 under 24.5K. The SPX is down 104 points, -3.8%, to 2658. The COMPQ is down 246 points, -3.4%, to 6992.

Euro 1.2393. Dollar/yen 109.24. Pound 1.3984. Bitcoin 7314. USD 89.49.

WTIC 63.83. Brent oil 67.38. Natty 2.75. Gold 1341. Silver 16.695. Copper 3.1935.

Fed’s Kashkari, a dove, speaks with Bloomberg and says, “I do not see a financial crisis on the horizon but we are paying attention to it (the stock market selloff).”

The year-to-date (YTD) losers are sinking like stones in the water. CHK -7.1%. TSCO -3.3%. MET -3.5%. EQT -5.1%. HOG -1.6%.

Energy is whacked. XLE -4.2%. Pundits told Ma and Pa to buy energy stocks this year and sent the novice traders straight into a buzzsaw. HES -6.2%. XOM -6%. CVX -5.3%. BHGE -5.3%.

The FAANG stocks are defanged. FB -5%. AAPL -2.5%. Apple was up on the session earlier but gave up the ghost. AMZN -2.7%. NFLX -5%. GOOGL -5.1%. The chips are smacked hard. SOX -4.7%. XSD -4.6%. SMH -4.5%. LRCX -5%.

Traders are selling stocks and buying Treasuries as noted by the yields falling (note and bond prices rising).

NYSE President Tom Farley appears on CNBC business television trying to look relaxed and encouraging investors to remain calm. Of course he does. Farley wins the Captain Obvious award declaring, “It is an extraordinary day.” Despite the flash crash, Farley says the trading is “smooth.” He says, “We are prepared for it.” If that is the case, why did a flash crash occur?

Farley is pressed on why the flash crash occurred. Is it a fat finger? Computer glitch? A computer system malfunction? Excessive trading traffic? Foley says he does not know what happened. That is reassuring. He says the matter will be investigated and he proclaims, “The system worked.” The NYSE was within 2% of triggering a circuit breaker which would have temporarily halted trading.

There is carnage on Wall Street. Floor traders are relieved to hear the closing bell to allow the dust to clear and figure out what happened. The Dow is negative on the year. The stock market experiences the largest point-drop in history. There is a lot of technical damage in the markets.

At 4 PM EST, US stocks end the session in a bloody mess. There is market carnage in all directions. The SPX is bludgeoned 113 points, -4.1%, to 2648.94. LOD 2638.17. The stock market crashed. The all-time high is 2873 from 1/26/18 and only six days later prints 2638 a 235-point loss, -8.2% off the record top.

The SPX has lost the 20 and 50-day MA’s and is testing the 100-day MA at 2634. Price closed below the critical 20-week MA at 2654. Market bulls need to move the S&P 500 above 2654 otherwise the downside will continue.

The 402-day streak of the S&P 500 trading without a -5% correction ends. The last 18 months is the lowest volatility period in stock market history. Obviously, that ended today with the VIX spiking to 38.80. The VIX is at levels not seen since a short spike in 2015 when stocks were selling off and also back to 2011. The VIX will begin trading at 3 AM EST when the European stock indexes open tomorrow.

The NYMO McClellan Oscillator drops to an uber low of -118 which indicates that a stock market bounce should occur at any time. Ditto the low NYHL. Ditto the low NYUD that plummets to -1235. The TICK machine prints -1633 today and uber low number that hints that a recovery relief rally is needed. The CPC and CPCE put/call charts are not updating so there are problems with the data feeds.

The TRIN spikes to 4.00 which indicates intense selling pressure. Interestingly, however, for today’s flash crash, a TRIN of 8, 9, 10, 13 and something wildly higher would have been expected. The 1.3 to 2.0 area for the TRIN represents orderly selling.

The Dow Jones Industrials crash 1175 points, the largest point-drop in history, -4.6%, to 24346. The 100-day MA at 24005 serves as support. LOD 23923. The all-time high is 26615 from 1/26/18 and drops 2692 points intraday, -10.1%. INDU, DJI, is temporarily in correction mode down more than -10% off the top. The Dow has lost 2,700 points in only six days on an intraday basis. The Dow is down 2269 points off the record top a -8.5% drop. Several traders were taken off the floor head-first today.

The Nasdaq Composite loses a huge 273 points, -3.8%, to 6967 losing its 50-day MA at 7070. The 100-day MA is at 6840. The NDX drops 264 points, -3.9%, to 6495. The NYA sinks 512 points, -3.9%, to 12573 losing the 100-day MA at 12615.

The Russell 2000 small caps collapse 56 points, -3.6%, to 1491. RUT stabs down through the 100-day MA at 1518. The 150-day MA support is at 1481. TRAN loses 337 points, -3.2%, to 10350. The 100-day MA support is 10210. The chips are slaughtered. SOX crashes 62 points, -4.7%, to 1255 losing the 100-day MA at 1264. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

(The above excerpt is from Keystone the Scribe)