Monday, January 21, 2008

U.S. Stock Market Crash Prevention Mechanisms

Watching the European and Asian stock markets plunge this Monday and Tuesday (their time) prompted me to research what mechanisms are in place to prevent a market crash here in the U.S.

According to the following mechanisms are in place:

- The market will halt trading for an hour if the Dow drops 10% before 2 pm.
- Trading will halt for two hours if there is a 20% drop in the Dow before 2 pm.
- If the Dow drops 30%, trading is halted for the day.

DOW futures are pointing to a 5%+ drop tomorrow morning. This is coming at the heels of market drops around 7-10% overseas.

I'm Back to Personal Finance Blogging

In the coming days I will start posting new content. During my time away from blogging I finished 13 months of training and deployed time in Afghanistan. In hindsight the tour was very rewarding.

In the coming weeks I will get back to posting on topics related to:
1.) Our recent purchase of a used car via ebay
2.) Our loan portfolio
3.) Our new dividend reinvestment plans
4.) What we're doing with our other investments.

If I were you, I'd keep my eyes tuned to tomorrow's stock market. It's likely to gap lower significantly. We've been in bonds, for the most part, since mid December and have also enjoyed some gains shorting the market. I'm seriously considering dipping my toes into the market this week if Monday's Asian & European market bloodbaths (i.e. German DAX down 6% on Monday alone) continue with the U.S. on Tuesday.