FLASH CRASH in ESRG
I’ve been documenting these flash crash whenever I hear about or see one. The reason? Because they are becoming more and more common and hitting big names that you are likely to trade. Today’s is the worst I’ve seen, from $102 to $.01 in 1 minute.
While ultimately the exchange will probably deal wit this and break up the trades, some of the not so extreme crashes may catch you at a loss. The first thing you need to know about them is in all cases I’ve documented, they first will see a negative divergence or distribution period before they occur which means I’m 99% sure they are pr-planned. The second thing you need to know is if you have stops placed with your broker, you will be stopped out and this is yet another reason I prefer to keep stops mental. And lastly, it’s best not to panic, nearly everyone I’ve seen recovers within a minute or so, although they usually fall a bit short of where they started the crash, as in the case here, from $102 and recovered back to $99.98
Every one of these I’ve covered has shown selling/short selling before they happen
Here’s the daily chart of the crash from $102 to $.01 and the recovery back up to nearly $99.
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