The situation in the foreign exchange market, since October 24, the Hong Kong dollar against the US dollar began to rise wildly, and even once quoted to the point of 7.7199 Hong Kong dollars for 1 US dollar. This figure has far exceeded the market's psychological expectations, so many banks took the opportunity to sell Hong Kong dollars, which also caused the exchange rate of the Hong Kong dollar to begin to fall, and by the close of London, the Hong Kong dollar was quoted at 7.73 Hong Kong dollars per 1 US dollar.

This price is undoubtedly very satisfying to the HKMA, because this price has hit a new high in 97 years, and at least for a period of time, the Hong Kong dollar will not have to worry about attacks from international speculators.

On October 27, international speculators continued to return to their positions, and although the exchange rate of the Hong Kong dollar fluctuated greatly on this day, due to the increase in market participants and arbitrageurs, the exchange rate of the Hong Kong dollar fell slightly, and the final price was reported at 7.7325.

It seems that the HKMA's move to raise the call rate has fully worked, and international speculators have not only not captured the Hong Kong dollar, but have also been burdened with a heavier interest burden. Subsequently, the HKMA began to sell Hong Kong dollars in the market in small quantities and buy US dollars to keep the Hong Kong dollar at a high level for as long as possible.

……

On October 27, U.S. time, the Dow Jones Index opened, as the world's most important market, and one of the latest markets, the performance of the Dow Jones Industrial Average is undoubtedly the vane of the global market the next day. If there is any wind and grass in the Dow Jones, other markets will be affected to varying degrees, just like the "Black Monday" in '87, when the Dow Jones Industrial Average fell. Then in Asia, it started with the fall of the Hang Seng Index, which first spread to the European market, but as a result, it in turn affected the US market.

Prior to this, the Dow Jones Industrial Average and the Hang Seng Index fell for three consecutive days, but on the whole the performance was normal, and the range of fluctuations was expected.

It's just that, unlike usual, this time the storm against the Asian market soon hit the American market with an unparalleled speed, and the reason for this was only one piece of news. And it was this news that hit the performance of the Dow Jones Industrial Average hard.

Daytime is the time of trading in the United States. In Asia, on the other hand, it was nighttime, and I didn't know what it was, but suddenly there was a rumor circulating in the market that the Swiss Central Bank was going to sell 1,400 tons of gold reserves. Although this news cannot be confirmed (it is past the time to go to work in Europe). I don't know where the news first came from (anonymous sources, unnamed officials, etc. are common tactics in the press). Also to protect the source). But the news was enough to send a major shock to the market.

The whole market is going crazy!

Since the collapse of the Bretton Woods system, the dollar has no longer been pegged to gold, but the dollar is the world's most powerful currency. It is still inherently considered to be the most valuable currency other than gold, and to some extent can be seen as a part of gold.

As a recognized value metal in the world, the price trend of gold is not only affected by internal factors such as production, reserves and spot supply market, but also by the US dollar price in the long run.

To put it simply, the US dollar and gold have a negative correlation in the long-term price relationship and a positive correlation in the short term. Although this relationship is strange and difficult to understand on the surface, it is not logically contradictory, because in the long run, the price of gold remains relatively stable, because its long-term value depends mainly on factors such as production and reserves, and does not have much to do with the performance of other economies.

For example, if the U.S. economy does not improve in the foreseeable three to five years, then the return on putting money into the U.S. market or investing in the U.S. dollar will not be very large, in this case, it is more appropriate to invest in markets such as gold and silver, which are quite stable in the long run, which is why the price of the U.S. dollar and gold are contradictory in the long run.

In the short term, the positive correlation between the US dollar and gold is purely based on market considerations, some may be inflationary factors, some may be US dollar factors, in short, it cannot be generalized.

This time, the news about the sale of gold by the Swiss Central Bank is clearly short-term, and the reason for this sell-off is naturally not because of the rise of the dollar, but because of the panic of the market about the entire asset price. Since the fall in the price of gold is very likely to become a reality, the current market price of many assets in the market is inflated relative to gold, so the market naturally forms an expectation that the price will fall. Supported by this logic, the Dow Jones Industrial Average soon took a sharp turn and began to fall sharply.

In the gold market, gold bears, who received inside information as early as last Friday, have long directed this plunge drama, on October 24, Eastern time, the New York gold index plummeted by $16 per ounce to close at $309 per ounce, a decline of 5.03%.

The Dow Jones Industrial Average fell sharply on October 27 due to the emergence of a sell-off in gold, partly due to panic, and partly due to panic selling.

The Dow Jones Industrial Average started to fall from 7,715 points at the open, and trading was sluggish all day, with the market full of selling stocks and buying very little. By 2:35 a.m. ET, the Dow Jones Industrial Average was down 350 points, triggering a circuit breaker that halted trading for 30 minutes.

The circuit breaker mechanism was born out of the stock market crash of '87, and the general rule is that when the market drops to a certain point, trading will be stopped for a certain period of time. The rule at this point is that the Dow Jones Average falls by 350 points and stops trading for 30 minutes, and if it falls by 550 points, it stops trading for an hour. The reason for this rule is to give investors time to calm down, after all, even the most rational investors will feel terrified and panicked in the event of a continuous and frantic decline in the broader market. In this nervous mood, it is inevitable to make irrational investment decisions.

This is the first time that the Dow Jones Industrial Average has triggered a circuit breaker since it was set up in 1988. Unfortunately, when the market resumed 30 minutes later, investors' confidence did not recover, and when trading resumed at 3:05, the market continued to fall, and this time it fell much faster than before. Even market makers have jumped on board, as they are also worried that the stock spot that has accumulated on hand will not be cleared, and as a result, it will not be time to close. The Dow Jones Industrial Average once again triggered the circuit breaker. At 3:30 a.m., it fell by 550 points, and according to the rules, trading will be stopped for an hour, and the remaining trading time is less than an hour, so this day trading in the Dow Jones market ends here. Close the market early.

The Dow Jones Industrial Average fell from 7715 to 7161 throughout the day. It fell by 554 points. The decline reached 7.18%.

Regardless of whether the news is true or not, the turmoil in the US market soon spread to the Asian market, which opened later, while the Hang Seng market in Hong Kong has not recovered from the plunge of the previous few days. Then another setback was made.

The first to be affected was the Australian market, where both the Australian dollar and the Australian stock market fell as gold prices fell sharply, with the Australian stock index falling 84 points, or 3.3%, from 2,561 to 2,477. Australia is the world's third-largest gold producer, and gold is also Australia's main export, so the news that the Swiss Central Bank is ready to sell half of its gold reserves has caused a heavy blow to the Australian stock market.

The stormy Hong Kong market was even more unbearable, opening at 9,649 points, down 850 points from the closing price of the previous trading day, which even exceeded the all-day increase on October 24, and the confidence of the entire market also fell to the freezing point with the opening figure.

……

"Close 100 lots and see how the market reacts." On this day, Zhong Shi did not sleep soundly as he did a few days ago, because he knew that today was a very critical day, first of all, there were only three days left before the delivery of the October futures index, and secondly, due to the sharp drop in the US market the day before, he smelled an unusual smell, so no matter how tired he was, even if he gritted his teeth, he had to hold on.

At this time, he was calling the broker, although it is now easy to place orders through the computer, but Zhong Shi still chooses this traditional way, because his trading lot is too large, which makes the entire brokerage trader have to operate around his trading. In this way, it is equivalent to hiring a team, and it will not affect the work of Tianyu Fund's employees, after all, this is his personal transaction.

100 lots priced at the 9600 position of the short order was immediately thrown to the market, within a few minutes of all transactions, and in these transactions, the proportion of short swaps is the majority, which also means that the market is very bearish about the market outlook, even outside of Zhongshi's expectations.

Seeing the speed and magnitude of the transaction, Zhong Shi couldn't help frowning, touched his chin and thought for a while, and decided to temporarily stop trading, ready to take a look at the attitude of the bulls first.

Since there is not a lot of trading time left for the bulls on the October contract, only about three days. In this case, even if the bulls make a monthly swap, there will still be lots left in the market in October corresponding to the unclosed shorts. The problem now is that the bulls are definitely hoping to change the month and achieve the purpose of reducing losses through the rollover, while the bears have unclear intentions and need to show it through the handicap on the board.

Zhong Shi's previous transaction was to observe the reaction of the other party through testing, whether it is long or short, they will inevitably have a strong interest in this large order with a lot of 100 hands, after all, although the institutions that can throw out this number are not a handful, but they are enough to represent the intention of a well-funded institution.

Sure enough, at least judging from the current trading situation, the bears were not too satisfied with the price of 9600, and quickly swept away these empty orders. Although Zhong Shi is not sure whether this momentum belongs to the party that shorts the spot of Hong Kong stocks, all he can do at present is to wait.

Soon, Hong Kong stocks fell again, especially financial stocks and real estate stocks, and by noon, the banking and real estate sectors were down 6.58% and 6.74% respectively from today's opening price. And the boss of the banking world, the stock price of the recovery bank even fell as much as 8% at one point.

In terms of state-owned enterprise stocks and red chip stocks, since the market opened, there has been a steady stream of capital inflows, and the performance is quite surprising, once rebounding by about 4%. It's just a pity that they can't stand alone, and it didn't take long for them to encounter a heavy sniper, and by the end of the listing, the red chips and state-owned enterprise stocks sectors fell by 4.47% and 3.13% respectively, and none of the entire Hang Seng market sectors rose.

At the midday close, the Hang Seng Index closed at 9240 points. (To be continued......)