“Look at market percent of Apple. Apple stock weighs in at 19% of the NASDAQ-100 index. This isn’t an error. Now look at how much Apple dropped on May 6. I show the calculated impact that Apple alone had on the NASDAQ-100 that day. This is more than a red flag; this is a smoking gun. It could very likely be the spark that ignited the fire that brought down the house,” Waggoner writes. “Using ratio analysis on one-minute charts, [I’ll show] that NASDAQ-100 stocks likely led prices down on May 6, 2010. [I’ll then show] how Apple’s extreme market percent of the NASDAQ-100 leveraged into a significant drop in the NASDAQ-100 and probably precipitated the ‘flash crash.'”
“What I’m unable to show is why Apple dropped 23%. The SEC should immediately study the trades of Apple on May 6. If a large trader(s) precipitated the market crash on May 6, Apple was the vehicle,” Waggoner writes. “I think the confluence of economic activity, market forces, and trading functionality thesis should be moved to the back burner, and a market manipulation thesis should be moved to the front-burner in the investigation.”
Full article here.
[Thanks to MacDailyNews Reader “Snow Leopard” for the heads up.]