Dow shortly plunges 1,600 points - biggest intraday point drop in history

U.S. stocks fell sharply in volatile trading Monday, extending a steep sell-off from the previous session.

The Dow Jones industrial average shed 1,178 points and briefly declined more than 1,600 points

The 50-SMA levels were key for DJIA and S & P 500 and traders were watching them. Immediately after their breakaway, the volatility spiked and the bears took full control of the movements. Activated SLs that were placed under the SMA , combined with cancelled pending orders increased the fall.

The declining movement intensified in the New York afternoon, with Dow losing more than 800 points in about 10 minutes.

"I think sentiment was a little too optimistic,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “What was driving the market up in January? It wasn’t the fundamentals, as good as they were, it was excessive confidence"

Stocks are under pressure from the rapid rise in interest rates. The 10-Year Yield is at a 4-year high.

The main question here is - is this a correction or the beginning of a bear market.

The answer from Wall Street is, that for a new bear market - something in the economy's fundamental must change first.

The important thing that we need to know here is, that the movement was not a product of a economic news piece or an event.

Source: Bloomberg Pro Terminal

Jr Trader Alexander Kumanov

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