Did Internet cause steep drop in stocks? Yes!

Tweet

Figure it out. It's not hard. Chinese stocks cracked badly to open the day, and since Asian time is 12-14 hours ahead of the United States, markets in India, Europe and finally the United States were for sure going to take a significant hit after all the panicked news that spread into global cyberspace like bird flu! But 416 points off the Dow? That was unexpected here. And as I am writing this discussion, the Japanese markets have plunged for a second straight day. This time around, the big boys on Wall Street will devise some sort of fallback strategy, but with the millions of day traders out there, stock prices are distorted. Many day traders sold short after hearing of the Chinese collapse on the Internet and likely a bunch of day traders already have their short sales in the pipeline for later Tuesday. Now this: If prices stabilize, or of the Dow shoots up at least half of what it lost today (say, 200 points), it will be a day-trader's dream. Day traders want wildly fluctuating markets so they can take advantage of the swings. "Normal" stock buyers don't, and lose. Anyway, happy investing!