Exactly like August 1987, when the Dow hit 2,720 they were looking up to 3,000, not down to 1,600 where it landed in October.
Just what they don't need, more rain from remnants of Hurrican Odile making way into corn belt later in week. Fields are already saturated.
read the "crop comments" on the Agweb dot com website--it will scare the sh* t out of you if you are a corn/bean/wheat short at these low prices.
Also a big drought in northern China may spur demand. Corn/bean/wheat arvest in north China in trouble.
Talk of SDS (sudden death syndrome) in many soybean fields due to cold & wet conditions. Also corn in the northern corn belt is exposed to early frosts and is still weeks from being out of the woods.
Sell sell sell.
Cramer said "not buy" at least until the Alibaba panic is over. I would wait until a retest of mid $90s, which should come soon.
In 1901, there was a corner in shares of Northern Securities. This caused most other securities to be dumped in order to cover shorts in N.S. or go long. The market plunged, except for NorthernSecurities.
Now, it appears that many stocks will be sold to buy Alibaba, especially those in similar sectors. Amazon & Netflix are at the epicenter of the selling.
Seeing the Alibaba effect. Baba vacuums money out of all the Momos--flix, Amazon, Ulta everything. Like the "Rich Man's Panic" of 1901--Northern Securities (NS) went up, nearly everything else fell as stocks were sold to buy or cover shorts in NS.
This week could be the test--lots of AMZN shares could be sold to buy lower PE new issue BABA. $220 I doubt, but $290 Amazon seems possible soon.
In 1901, a squeeze in one stock brought down the entire market. Northern Securities was cornered, driving the price greatly higher. The squeeze led to a huge selloff in almost every other stock, as they were sold to buy or cover Northern Security positions.
This week, Alibaba goes public in a huge new issue. Jim Cramer himself says this could cause a retreat in the market, as most stocks are sold in order to establish positions in Alibaba.
TBT call option buyers did well though :)