Now, this trader, call him Bob, yeah, Trader Bob, has to be looking at the charts from Wednesday and Thursday, seeing that the Dow took a deep dive on both days before recovering, but also that Thursday's dive was deeper than Wednesday's and the closing level significantly lower as well. So, Trader Bob may be thinking, "This looks suspiciously like the work of the PPT or maybe even short-covering."
Scanning the headlines for Friday morning on his Bloomberg terminal, Trader Bob takes interest in a story out of Spain that is saying Prime Minister Mariano Rajoy is facing a vote of no confidence in that country's parliament, meaning that an entire country could be soon plunged into a chaotic situation. Bob also recalls that part of Spain - Catalonia - tried, unsuccessfully, to secede from the nation last year.
Then, Trader Bob sees the price of oil dropping off the chart, and notes that Saudi and Russian oil officials are stating that crude supply increases are likely in the near future.
Trader Bob, considering how much he's made for clients by going long oil futures, produces the following thought bubble:
Amazing, isn't it, that even Saudi government people and those pesky Russians understand some of the principles of economics?
Whoda thunk that if gas prices go up from about $2.30 a gallon to roughly $3.00 a gallon (a 30% increase), some people might not have as much disposable income?
And, if that lessened amount of disposable income is not spent on consumer goods, then whole industries might suffer?
And, if whole industries suffer, that might affect the greater economy?
It's not rocket science, it's the dismal science called economics.
So, what's Trader Bob likely to do Friday morning when the opening bell rings?
Well, for one thing, since he has 24-7 access to the futures market, he's dumping all his WTI crude futures calls. Fast. When the market opens, he's probably going to sell some stocks, just to get out in front of the herd, where he won't be trampled by the rush to the exits.
But, Trader Bob isn't actually convinced that a selloff is a done deal, so he's not going to get too far out in front, just enough to trim some of his more speculative positions. He doesn't want to be, as surfers call it, "hanging ten."
Trader Bob will be patient, with one eye on oil but a more focused eye on the US equity markets. If things go from bad to worse, he'll consider whether or not it's time to bail. 200 points down on the Dow would be a test of Thursday's low (24,605.40). Breaching that level might produce the stampede everyone on Wall Street fears.
An hour prior to the opening bell, at 8:30, Bob sees the Dow, S&P, and NASDAQ futures plunging into the red. He sells more oil futures. He looks around the trading floor. Some of the younger traders are looking a little queasy, green in the face. The older, more experienced guys are handling it better, having coffee and donuts while taking up substantial short positions is selected stocks, some of them whacking away at oil companies, others focused on Facebook (FB) and Apple (AAPL).
Trader Bob's hands are getting sweaty. He knows that he's prone to panic attacks, but so is all of Wall Street. He's not thinking about a three-day weekend. He's thinking about selling everything and moving to Maine.
Dow Jones Industrial Average May Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 5/1/18 | 24,099.05 | -64.10 | -64.10 |
| 5/2/18 | 23,924.98 | -174.07 | -238.17 |
| 5/3/18 | 23,930.15 | +5.17 | -233.00 |
| 5/4/18 | 24,262.51 | +332.36 | +99.36 |
| 5/7/18 | 24,357.32 | +94.81 | +194.17 |
| 5/8/18 | 24,360.21 | +2.89 | +197.06 |
| 5/9/18 | 24,542.54 | +182.33 | +379.39 |
| 5/10/18 | 24,739.53 | +196.99 | +576.38 |
| 5/11/18 | 24,831.17 | +91.64 | +668.02 |
| 5/14/18 | 24,899.41 | +68.24 | +736.26 |
| 5/15/18 | 24,706.41 | -193.00 | +543.26 |
| 5/16/18 | 24,768.93 | +62.52 | +605.78 |
| 5/17/18 | 24,713.98 | -54.95 | +550.73 |
| 5/18/18 | 24,715.09 | +1.11 | +551.84 |
| 5/21/18 | 25,013.29 | +298.20 | +850.04 |
| 5/22/18 | 24,834.41 | -178.88 | +671.16 |
| 5/23/18 | 24,886.81 | +52.40 | +723.56 |
| 5/24/18 | 24,811.76 | -75.05 | +648.51 |
At the Close, Thursday, May 24, 2018:
Dow Jones Industrial Average: 24,811.76, -75.05 (-0.30%)
NASDAQ: 7,424.43, -1.53 (-0.02%)
S&P 500: 2,727.76, -5.53 (-0.20%)
NYSE Composite: 12,696.69, -46.71 (-0.37%)
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