Just wanted to take a moment to briefly give a 24 hr chronology as to what happened between closing bell of the New York Stock Exchange on Thursday at 4p and the close of the NYSE trading day at 4p Friday to shine a light as to the mindset of investors and traders in a global financial market.
Thurs March 3rd, 2011--
4pm EST -- NYSE closes at 12,262 (+198) even though Nothing positive happened in the economy that day to trigger the response. Its all based on anticipation of the jobs report the Bureau of Labor Statistics was to release at 8:30am the next day and positioning for further profit gains.
7p-3a EST -- Markets in Asia are very excited that the NYSE has spiked so dramatically. They assume it must mean the Americans must know something & impending jobs report is going to be Really Good. As a result Japan's stock exchange, Nikkei 225 rises +107 to close at 10,693, and China's exchange (yes finance novices, Communist China has a stock exchange), Hang Seng jumps by +286 to close at 23,408.
Fri March 4, 2011 --
3am EST -- Americans are still sleeping as Europe opens their Friday trading day. And they see the excitement in New York carrying over into Asia and decide their investors want to get in on the 'fun'. So London's stock exchange, FTSE spikes up nicely until 2p, as does other markets in Europe such as DAX, Germany's stock market and France's market, CAC 40.
But then.. Gasp...
Then the stock markets in Europe dropped hard to all end lower than they did at the start of Friday's trading day. Hmm.. Gee.. wonder what happened at 2p, London Time?
9 am EST -- The NYSE opens for its trading day. (New York is 5 hours behind London; 6 hours behind Paris). And all those silly, silly investor dum-dums read the jobs report which was released 30min prior to Opening Bell... and they see that the unemployment picture was overall as bleak today as it was a month ago.. and they see that pretty much for all demographics there was little to no change. And that their evil little faces are covered with egg.
4pm EST -- The NYSE has a "magical" rally of 90 points in the last 30 minutes (the Fed once again rigging the market to try to stabilize it from further drops come Monday, by pumping a massive amount of money to trigger a buying rally after it was down by as much as 180pts by 3:30p) to close at 12,169 ( -88 pts)
So in summary:
1) US investors put their money in on Thurs expecting to make a killing
2) And everyone around the world followed wanting to make a killing too
3) US investors realized Friday they have no clue what's going on.
4) So they pulled their money out, god bless their greedy, soulless hearts.
5) And European investor copycats pulled their money out too..
6) And Asian investors.. well they wanted to copycat but couldn't because their markets were closed for the weekend.
Sheep following sheep... This is how the global stock market operates.