1997 VIX pattern de ja vu, 1997 ^ 1998 VIX level 37.50
CAPITULATION - "R"eversal DAY, Screaming "R" Day
[b]The Fed Statement 8/17/2007
Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably. The Committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.
Voting in favor of the policy announcement were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Richard W. Fisher; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Michael H. Moskow; Eric Rosengren; and Kevin M. Warsh.
Dow jumps 233 on Fed's discount-rate cut
After a wild ride Thursday, stocks skyrocket as the Federal Reserve cuts the discount rate by half a percentage point. Hewlett-Packard reports a jump in profit. Dell restates earnings. Whole Foods can move forward with its purchase of Wild Oats.
Top GainersSymbol %Change
Top LosersSymbol Change
Exchange RatesCurrency US Dollar
British Pound to US Dollar 1.982500
Euro to US Dollar 1.348000
Japanese Yen to US Dollar 0.008700
Canadian Dollar to US Dollar 0.942600
"Here I come, to save the day . . . "
It wasn't Mighty Mouse who came to the markets' rescue Friday morning, but Federal Reserve Chief Ben Bernanke.
After a wild week, the Fed cut the discount rate to 5.75% from 6.25%. The move is intended to help ease fears that have been causing wild swings in the markets over the past few weeks.
Stocks, especially financial stocks, soared on the news, climbing nearly 322 points right after the open, after a heck of a roller-coaster ride on Thursday.
While gains had pared back a bit at the close, they were still big. The Dow Jones Industrial Average was up more than 233 points, or 1.8%, to 13,079. The Standard & Poor's 500 Index was up nearly 35 points to 1,446, and the tech-heavy Nasdaq Composite Index also rallied, up 54 points to 2,505.
Stocks that had been battered all week, such as Countrywide Financial (CFC, news, msgs), Washington Mutual (WM, news, msgs) and Lehman Bros. (LEH, news, msgs), saw big gains. Countrywide led the S&P 500 with a 13% gain to $21.43. Washington Mutual was up nearly 8% to $38.37. Lehman Bros. jumped 6.1% to $58.11.
Countrywide's problems financing its business operations in the last two weeks were a major reason for the market's recent turmoil.
I remember quite a bit about both years. The picture to the left is me in the CBOT's then newly opened Dow pit on 10/27/97 . The photo appeared in Time magazine the week after the '97 crash. Greenspan was the cover and I'm on the index page, pictured between Slick Willie and Hunter S. Thompson. biggrin.gif
There was also an interview with a guy I'd never before heard of. Jim Kramer.
'97 was just a one day deal. A more volatile Feb. 27th. All off Asia. And Niederhoffer, lol. In fact another trader who'd been a subjet in the first Market Wizard's book sold into the subsequent rally, kept adding and lost millions.
'98 was more like today. The bad news about LTCM, Russia, Asia, Impeachment and Treasury spreads went on for months. It all ended with the biggest bang I'd ever seen. Around 2:30 on October 15 the Fed cut by 25bp. Dow futures rallied 500pts into the close. It wasn't until the trading days following 9/11 (almost 3 years) that the market saw those prices again!!!!
Anyone can elaborate on 1997-1998 to now? The financial crisis similarities?
VIX high 37.50 +/-, 2002 or 1997 de ja vu when market rallied 60% after making the bottom at 730 then rallied to 1170.
Then, another VIX spike in 1998.
Edited by Trend-Signals, 18 August 2007 - 10:25 AM.