Late Day Flash Crashes On May 13th 2014

On Benzinga's Pre-Market Info show this morning Joel and Dennis discussed yesterday's broad swath of mini flash crashes that hit before the close. After the 3:40PM EST time period yesterday roughly 20 different stocks were hit with mini-flash crashes. The movements ranged from 7 to 8 and as high as 10 percent in one-second. Most likely the trades were an erroneous push of the Market Order button as opposed to the Market On Close button. These types of crashes happen when the liquidity isn't in the book, which is something HFT intermediaries like to highlight they provide. Had this been the past, with a floor specialist, he would go "1-up" and offer the participant the opportunity to verify the order. Now-a-days we have instantaneous order filling and the buffer of a human specialist is now gone. This was clearly a human error and thanks to the automated system we have now, these errors manifest in the market place instantly and must be dealt with accordingly. Placing "fishing-orders" in stocks YOU own, which anticipate these types of moves, may offer an opportunity to decrease your cost average. However, anticipating these moves and taking advantage of them is nearly impossible. Moving on, Fossil FOSL had a great beat that was ignored as the company issued weak second quarter guidance forcing traders to sell the stock this morning in the pre-market down just more than $8.00. Yahoo YHOO is buying Blink which is a competitor to SnapChat. Going back to the most recent earnings date, we can see Yahoo jumped over $37 which offered alert traders three great opportunities to fade. Any moves above $37 on this Blink news may offer a great fade. Cisco CSCO reports tonight and is flat in the pre-market. Expect some tight range trading until tonight's news catalyst.