Haywire Trading Platforms Sabotaged “Black Monday” Retail Dip Buyers
With Monday’s global market sell-off triggered by a panic in Japan, investors logged into their stock trading platforms to buy (or sell) the dip through institutions like Charles Schwab, Fidelity, TD Ameritrade, Vanguard, E-Trade, and Wells Fargo to buy the dip. But whether these retail traders were planning on panic selling or scooping up discounted stocks, outages at many of these major brokerages sabotaged their plans. However, one is left wondering if the actual goal was to prevent waves of retail selling that would cause stocks to dump even more dramatically.
🚨#BREAKING: Multiple brokerages, including Charles Schwab, Fidelity, Vanguard, TD Ameritrade, E-Trade, UPS, CenturyLink, and Interactive Brokers, are currently down and reporting errors amid market crashes. pic.twitter.com/H2htHnXynT
— R A W S A L E R T S (@rawsalerts) August 5, 2024
Of course, big-time traders, hedge funds, and others in the “in-club” can still buy and sell, since they don’t rely on these consumer-facing brokerage platforms. But the average Joe and Jane investor were robbed of a dip-buying opportunity by their own financial institutions amidst the market chaos.
NASDAQ 5-Day Chart
Whether or not “buying the dip” is even a good idea is open to question, in this case. JPMorgan’s own trading desk has advised against it. The wisdom of the advice partly depends on whether or not the Fed will enact an emergency rate cut, as many hope. But with gold down along with stocks, Peter Schiff thinks the market isn’t expecting a sudden “rescue stimulus” from the central bank. As he observed on Twitter/X:
“#Gold is down over $80. This is actually a bearish sign for the markets, which have crashed to new morning lows, with the Dow off over 3% and the #NASDAQ down more than 6%. Gold going down suggests markets don’t expect the #Fed to come to the rescue with an emergency rate cut.”
That said, gold began to recover slightly from its lows earlier on Monday, when the tweet was posted:
Gold vs. USD, 5-Day Chart
Whether stock traders should be long or short, gold tells the real story of what the market expects to happen. But with circuit breakers ready to shut down trading and major retail platforms seemingly going down at the most opportune (or inopportune) times, it doesn’t matter: the little guy on Main Street with stock exposure in their portfolio can’t act on market moves. That, apparently, is a privilege reserved for Wall Street.
If these brokerages weren’t locking out their own users, would stocks crash even harder under the weight of panic sellers rushing to dump their holdings en masse? With so many distortions, dirty tricks, fake data, and other forms of central planning tomfoolery, we’re left only with educated speculation of what would actually happen if markets operated freely.
After all, part of the arrogance-fueled goal of central planning is to prevent the existence of free markets by any means necessary — to replace economic mother nature with the “wisdom” of bureaucrats and academics.
