Down over 400, correction now over 700 points in just a few minutes. Incredibly quick drop. Now over 850 points as I am writing.

Accenture went from $40 to a $.01 (yes one penny) and then back to $40+ in a minute or two. How that could have happened is not just beyond common sense it's beyond belief. Look at the day's range and the 52 week range. Clearly the SEC has to strike all those trades. The SEC has to do something to regulate high frequency trading.

http://finance.yahoo.com/q?s=acn

from what i heard there was some sort of computer glitch that messed up a few different stocks

P&G was also one but nothing like Accenture (ACN). If you bought a million shares of ACN at a penny for a $10K investment a few minutes later you'd have made $39,990,000.

Sorry - had to put that in bold at size 5. If this doesn't bring some regulation into high frequency trading, nothing will

Capital gains taxes would have been a killer if cashing out. Lol.

I could have read this incorrectly, but on CNBC last night, I saw that NASDAQ was voiding trades made during the time period where the glitch was affecting the market.

If someone pushed the "B" button instead of the "M" button, as was claimed, you have to have the money in your account or the trade does not go through, or so I thought. So this person was either very rich, a large fund or it just did not happen like that. As for the real market, it is concerned over the European situation and I would not be surprised if it drops some more.

That was a sell order, probably at market, not a buy order. If it was a buy order the market would have went the other way. But if it was a buy then all you need is half the money.

But I think the important point here is how easily manipulation can be. That's the real lesson. The second lesson is that this occurred in a 2:1 leveraged market. Imagine how easily guys like Soros manipulate much higher leveraged markets like currency trading, oil and commodities in general. Basically they effect currency trading and then they just buy the other side of the trade in commodities with a small percentage of hedge fund monies, but they leverage the trades with the value of the whole fund. Short the currency and bring it down and buy the commodity side long and you make money at both ends. The amount you can leverage further just goes higher and higher and this is how you get your bubbles. As they go along they invent new ways to lengthen the trade ala the gambling investments that are bringing down Goldman Sachs. You get enough long traders at both ends (currency short, investment long) and you simply shake the tree by reversing positions for short time periods. This is what these guys have been doing all along with all commodities. They move from currency to currency. In the 90's it was the yen and British pound. Since the 90's it was the dollar and right now it's the euro. It may stay the euro for awhile or go back to the dollar. Depends whether or not they believe the euro will be a short-lived currency. And regulation makes it easy to do all this because it only requires 5-10% leverage. This is what happens when too much money gets too concentrated and rules are lacking. It's like giving guns to most of the town and having a handful of cops to protect the town. Now when this doesn't work is when there's a run on the bank and they have to go to cash. This is a situation where they have to unwind everything in order to make cash payments and the only currency they will do that with is the dollar. Hence bonds rise, interest rates fall, the dollar strengthens rapidly, gold strengtens and just about everything else falls. The hedge fund manager loses control at that point and loses at both ends. This is why the whole industry nearly went under in the crash. Why - because the money has become unconcentrated. That's how oil goes from $147 to 33 in months. Just like a fund manager buys thru bad fundamentals, he will have to sell below prices that fundamentals support. The greater the leverage was in what he bought the faster and deeper he has to unwind. The highest leveraged investment will always fall the most.

Re the trades - here's the language and frankly, with as much as I understand about finance, I don't really understand what this means.

Nasdaq OMX said it would cancel trades with price deviations of more than 60 percent between 2:40 p.m. and 3 p.m. from their 2:40 p.m. levels, and the New York Stock Exchange said it would similarly cancel trades on its all-electronic NYSE Arca platform that deviated over 60 percent from their last print at 2:40 p.m. between 2:40 and 3 p.m.

Let's use ACN for example. If it's trading at $40 at 2:39 or 2:40 what are the trades cancelled in that time frame. Trades that were made under $16? It's possible of course that no trade ever got in this window on the NYSE. For example though P&G reached $39 (from $60) on pure NYSE trading it never got lower than $56. Anyway in reading that language it's not clear to me what the 60% figure refers to.

By the way - in yesterdays trading Accenture wasn't the widest trade value difference. Exelon went from $44 to - and get this - a value of .0001. In effect you could have made an investment in Exelon of $1,000 and bought a million shares and minutes later sold them for $44,000,000. This is all because of a high frequency trading glitch.

The whole system has gotten too sophisticated for it's own good technology-wise. Many traders want a 24/7 365 days-a-year market since most trades are done electronically now - and they may get it one day. As Ice said, everything is manipulated now and funds essentially control the market with their hedging strategies and programs that make huge trades that move markets the milli-second price triggers are hit. There's no such thing as fundamental, value-based investing anymore.

Wall Street is largely a self promoting industry now and has gotten away from the original core concept of investing in the fortunes and misfortunes of businesses. Exotic financial instruments are vehicles for money making money for the insiders and investment banks who, along with hedge funds manipulate the markets for personal gain. The adage that over time stocks outperform other investment options is also false. It very much depends on when one enters the market and, adjusting for inflation, the capital markets have often gone through decades when it under-performed any number of other investment options. Sure, you can get lucky with timing, but you can also get lucky in other areas that are not as manipulated, volatile, and risky.

Good points. After the market tanked in 1929, I believe it took until 1954 for the Dow to return to its pre-crash levels. If someone started their career back then and funded a 401K plan in the early 30's, they really wouldn't have had any gains at all for the first 25 or so years if they were in an index fund.

It's amazing that trades like the ones in this story are even allowed. Just note what this article says about these firms making more and more money thru the disastrous 2008 fall. This is more proof of Robbbs post that the last thing that 80-90% of all trades on Wall street are doing is investing. Those of us old enough all remember the 1987 crash when the Dow lost 25% in a day. On that day less than 600 million shares traded. Contrast that with the number of trades stated just from one firm in this story. When you have trades that buy and sell the same stock in 11 seconds and the greater the volatility the greater the profit, forget about a market, you d'ont even have a casino. You have a rigged system controlled by high frequency trades and if all the trades on these system went the same way they could conceivably drop the Dow to a few points in a very short period of time. This completely explains how ACN went from $40 to a penny in a minute or two and then back up to $40. A minute is a long time for high frequency traders. It's nearly 6x longer than the average length of time these stocks are held by high frequency traders. Clearly all these sytems wer trading down the stocks that went to a penny and what's worse is that at the end of the day these guys hold a net position of no stocks even though they've traded far more shares, probably multiples of shares traded on the entire day that caused the 1987 crash.

The personnel at these high frequency trading firms d'ont even know what they are buying and selling. Just read this excerpt from the linked story:

Showing a computer chart to a visitor, Mr. Narang zeroes in on one stock that had recently been a winner for the firm. Which stock? Mr. Narang clicks on the chart to bring up the ticker symbol: NETL. What’s that? Mr. Narang clicks a few more times and answers slowly: “NetLogic Microsystems.” He shrugs. “Never heard of it,” he says.

http://www.nytimes.com/2010/05/17/business/17trade.html?hpw