Bottom just fell out of Nikkei

Re:Bottom just fell out of Nikkei by MichaelApproved on Tuesday March 15, 2011 @01:41AM (#2326178)

A large drop in a market usually triggers sell orders that were put in place dropping the market further which trigger more sell orders and so on.

Many people who are levered don't have the capital to withstand this type of drop and get washed out causing further selling.

It's a chain reaction that eventually cools off. Let's hope their fuel rods do the same!

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Re:Bottom just fell out of Nikkei by michaeldhopkins on Tuesday March 15, 2011 @11:00AM (#2327757)

Usually, eh? I assume you have bought your put options?

This can be true, but remember that you don't know where the sell orders are placed. We could have already seen the trigger and the corrpesponding drop-off.

Also, remember that many investors believe this, so they put buy triggers below where they think sell triggers are. Also, there are value investors who place buy triggers without regard to the existence of sell triggers.

I'm not saying that the phenomenon you describe does not exist here, and I acknowledge it has happened in the past. But you need to qualify axioms like that to see if they apply to new situations.

Full disclosure: I made a small-but-quick profit on the Nikkei today.

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