What in the hell…

…happened today?  I wasn’t really hawking the markets today since I had quite a busy workday, but at one point the Dow(.DJIA) was down 1,000 points.  Did this occur because f European debt issues, or a trader error?  CNBC is alleging that its sources say that a trade from one of the world’s largest investment banks put in a trade for “b” (billion) instead of “m” (million).  That seems crazy to me, but I guess human error could affect this type of transaction.  Most are speculating that the trade involved Proctor & Gamble (PG).  See chart below.

The VIX hit 34 today, the highest value in a few months.  I think this was the largest one-day jump in the VIX (30%) since September 2008.  The VIX, of CBOE Volatility Index is (from investopedia.com):

The ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the “investor fear gauge”.

There are three variations of volatility indexes: the VIX tracks the S&P 500, the VXN tracks the Nasdaq 100 and the VXD tracks the Dow Jones Industrial Average.

Another interesting item to watch is the Euro currency, which has been losing its value to the USD as of late. With all of the European debt issues in the news lately in Greece, Spain, Portugal, Iceland, Italy  – just to name a few, the Euro as a currency has been in question.  See below for a chart of the ETF, DRR, which is a double short ETF of the Euro.

The weekly ATR for the S&P held, but my daily SPY ATR broke through recently…

What does this all mean?  This was a truly chaotic day in the markets, one in which may have been significantly influenced by a trader error, but what if this signals more motivation for the Shorts and a view of the market topping in the past couple months in 2010?  This proves difficult for any part-time traders out there, but I am intrigued to see how the market reacts in the upcoming days and weeks. 

Market Pros discuss the possibility of a larger sell-off…

Jim Cramer discusses what a 1,000 point drop means…

NYSE says electronic trading was to blame…

U.S. Stock Slump Is ‘Normal Correction,’ Rogers Says…

Good luck to all and happy trading!