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Trading Halts: What You Need to Know About This Circuit Breaker Stock Market

So many people have no idea they’re trading in a circuit breaker stock market. That boggles my mind. This is something you need to know. Even if you do all the due diligence, get in safely, and manage your risk … what happens if the stock halts? You’re…

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So many people have no idea they’re trading in a circuit breaker stock market. That boggles my mind. This is something you need to know.

Even if you do all the due diligence, get in safely, and manage your risk … what happens if the stock halts? You’re stuck in a volatile stock, unsure which way it’ll go when trading resumes.

Don’t let the market take you by surprise. The more you learn about your environment, the better you can function in it.

That’s what this is all about. Learn a little bit every day, and, after a while, you’ll start to connect the dots.


I’ve been trading the same patterns for 20+ years because early on in my career I took the time to study every day. After a while, I started to make connections. The idea is to expose yourself to as much information as possible to prepare.

Sometimes you’ll get caught off guard … It happens. But if you get stuck in a halt and panic, your account could suffer. Don’t let your emotions drive your trading.

Let me help you understand the circuit breaker stock market better…

What Is a Circuit Breaker in the Stock Market?

whats a circuit breaker stock market
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Stock market circuit breakers are meant to stop panic selling and lower excess volatility.

Check out my NO-COST “Volatility Survival Guide” for guidance on that…

Market Wide Circuit Breakers (MWCBs) follow the S&P 500. That means if the index drops by too many percentage points, trading on certain U.S. exchanges halts.

You need to understand this because it affects every trader in the market. If an MWCB activates, your open positions will halt even if the stock you’re playing isn’t volatile.

A trading pause gives people time to digest new information and check their emotions.

That’s not a bad thing necessarily. A huge part of trading is controlling emotions. I talk about it all the time. Losing is part of playing the game. But the key is controlling your losses.

That’s why circuit breakers exist.

Even the best traders let their emotions get the best of them sometimes. A few minutes to think is all some traders need. It could be the difference between a market crash and a rebound.

In extreme cases — if the S&P 500 drops too much — trading halts for the rest of the day. After-hours trading is also canceled.

The bottom line: if you’re in a stock and trading halts, you must know what’s going on. That’s how you make the best decision once trading resumes.

How Does a Circuit Breaker Work in the Stock Market?

Trading stocks that make big moves can seem attractive. But big potential profits mean big losses lurk just out of sight.

Circuit breakers halt those losses and lower volatility. Let’s break it down…

Level 1

This is the first line of defense. A level 1 circuit breaker activates when the S&P drops 7% or more. It’s measured from the previous day’s closing price.

Trading will halt for 15 minutes … unless it’s after 3:25 p.m. Eastern because there’s usually volatility in the last 35 minutes of the trading day.

Level 2

If trading resumes but the S&P continues to drop to 13% or more, trading halts for another 15 minutes. Once again, if it happens after 3:25 p.m. Eastern, everything continues as normal.

Level 3

This is code red. If the S&P 500 drops 20% or more, trading halts for the rest of the day. Level 3 circuit breakers can activate at all hours of the trading day.

What Is the Circuit Breaker Rule?

It’s also known as the Limit-Up Limit-Down (LULD) rule. Just like there are MWCBs, there are also circuit breakers for individual stocks.

See how circuit breakers are a big part of our current trading environment? This is a unique market historically. You must know what you’re up against.

There’s a difference between MWCBs and the LULD, so let’s go over it …

The biggest difference you need to know is that MWCBs only halt trading for volatile downward price action, but LULDs halt stocks going down or up.

The limits are different too.

In general, trading halts when stocks surge or decline past 5%, 10%, and 20% limits. Levels can vary based on what you’re trading.

The percentages are doubled in the first 15 minutes and the last 25 minutes of the day because trading is usually more volatile at the beginning and end of the trading day.

We calculate the percent loss from the average price of the last five minutes. The stock has to trade outside of the percent limits for 15 seconds to trigger the halt.

Halts usually last five minutes, but they could last 10. It depends on the situation.

Curious about how this all started? It’s pretty interesting. Check it out…

History of the Circuit Breaker in the Stock Market

history of circuit breaker stock market
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On October 19, 1987, the Dow Jones Industrial Average (DJIA) lost 500 points and fell 22%. It’s still the largest percentage loss in U.S. stock market history.

It was a result of world politics at the time and the rise of computer trading. Starting in Hong Kong, the massive sell-off impacted markets around the world.

After that, the crash regulators agreed the markets needed a system to protect against huge drops like that happening again.

It hasn’t been perfect. It evolved after the limits failed to stop the flash crash of 2010. That’s when the market fell 9% in 10 minutes.

The MWCB used to follow the DJIA, but it moved to the S&P 500 in April 2013. Regulators created the LULD rule at this time too.

Notice how the environment changes over time. Never get too comfortable. Regulations can change at any time and you must be up to date.

Since 2013, trading has halted market-wide only a few times.

When Was the Last Circuit Breaker?

The last time an MWCB halted trading was March 18, 2020. The decline was mostly because of the pandemic. It’s no secret that lockdowns and uncertainty were hard on the stock market in 2020, especially in the beginning.

It was a level 1 circuit breaker. Trading halted for 15 minutes in the early afternoon then resumed.

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How Many Circuit Breakers Have Happened in the U.S.?

There have been multiple circuit breaker triggers in the U.S. Some are market-wide, but most are individual and happen more often.

One of the most notable was on October 17, 1997. Back then there were only two levels of circuit breakers. One halted trading for 30 minutes if the DJIA dropped 350 points in a day. The second halted trading for the rest of the day after another 200-point drop.

At the time, a level 1 circuit breaker trigger was only a 4.5% drop. Some felt the halt was unnecessary considering the low percentage loss.

Since then the MWCB rules have changed. They started following the S&P 500 and moved to a percentage-based system instead of points.

March 2020 showed us the true power of the trading halt. On four separate days, the market halted trading for 15 minutes. All due to growing pandemic concerns.

All four halts were level 1 circuit breakers. Who knows how far the market could have fallen without the pause in trading.

This is why I say it’s good to study the past. It helps you understand how the circuit breaker stock market came to be. Anyone can read a book on rules. But if you really want to understand this environment, study its history. Try to learn why we have circuit breakers.

The MWCBs are in effect to lower volatility, but some traders are less trustworthy…

Circuit Breaker Stock Market Critiques

Some people think circuit breaker stock markets do more harm than good. They argue that instead of reducing volatility, they’re creating it.

By halting trading, orders pile up … until the market opens again. Then the market surges with a bunch of orders placed during the halt.

I’ve seen Level 2 quotes when orders pile up like that. It’s a huge landslide effect. Try finding a stock that’s halted and watch what the Level 2 does when trading resumes. That’s a great learning opportunity.

If you get stuck in a stock, you need to know what’s going on so that when the halt lifts, you can make the best decision to stay safe.

Check out my “Learn Level 2” DVD to learn more about this great trading tool. I use it for every trade…

Circuit Breaker Stock Market: Frequently Asked Questions

What Is a Circuit Breaker?

It’s a regulatory measure that attempts to decrease volatility and panic selling in the stock market. There are market-wide circuit breakers and breakers for individual stocks. If volatility increases past a certain level, trading halts.

Do Individual Stocks Have Circuit Breakers?

Yes, and unlike MWCBs, individual stocks can halt up and down. Too big of a price swing will invoke the limit-up limit-down rule, and trading halts for 5 to 10 minutes.

Does Nasdaq Have Circuit Breakers?

Yes, the Nasdaq has MWCBs. Most big exchanges do. Since Black Monday, regulators are convinced we need safety measures to protect the markets.

The Bottom Line on the Circuit Breaker Stock Market

conclusion circuit breaker stock market
© Millionaire Media, LLC

I’m glad you took the time to read about circuit breakers. Traders that know more about their environment are set up for success.

You should try to learn more every day. That’s how the best got where they are.

Stock trading is hard. It takes a lot of time and dedication.

Take it from me. I realize I’m a better teacher than a trader. For a little over a decade now, I’ve been teaching others how to trade stocks.

The Trading Challenge is not for the faint of heart. All my millionaire students spent months and years studying before finding their stride. If you think it’s for you, apply … but I don’t accept everyone. You have to show me you can do the work.

If you’ve read this far, you might have what it takes.

I hope this post helps you if you ever get stuck in a halted stock again. As volatility goes up, we could see more of a circuit breaker stock market. And if it happens to you, remember to find out why the stock you’re trading halted and keep your expectations realistic. Emotions just mess with your head.

What do you think about circuit breakers and the circuit breaker stock market? Have you gotten stuck in a halted stock before? Comment below. I love to hear from all my readers!

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The post Trading Halts: What You Need to Know About This Circuit Breaker Stock Market appeared first on Timothy Sykes.

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Chinese migration to US is nothing new – but the reasons for recent surge at Southern border are

A gloomier economic outlook in China and tightening state control have combined with the influence of social media in encouraging migration.

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Chinese migrants wait for a boat after having walked across the Darien Gap from Colombia to Panama. AP Photo/Natacha Pisarenko

The brief closure of the Darien Gap – a perilous 66-mile jungle journey linking South American and Central America – in February 2024 temporarily halted one of the Western Hemisphere’s busiest migration routes. It also highlighted its importance to a small but growing group of people that depend on that pass to make it to the U.S.: Chinese migrants.

While a record 2.5 million migrants were detained at the United States’ southwestern land border in 2023, only about 37,000 were from China.

I’m a scholar of migration and China. What I find most remarkable in these figures is the speed with which the number of Chinese migrants is growing. Nearly 10 times as many Chinese migrants crossed the southern border in 2023 as in 2022. In December 2023 alone, U.S. Border Patrol officials reported encounters with about 6,000 Chinese migrants, in contrast to the 900 they reported a year earlier in December 2022.

The dramatic uptick is the result of a confluence of factors that range from a slowing Chinese economy and tightening political control by President Xi Jinping to the easy access to online information on Chinese social media about how to make the trip.

Middle-class migrants

Journalists reporting from the border have generalized that Chinese migrants come largely from the self-employed middle class. They are not rich enough to use education or work opportunities as a means of entry, but they can afford to fly across the world.

According to a report from Reuters, in many cases those attempting to make the crossing are small-business owners who saw irreparable damage to their primary or sole source of income due to China’s “zero COVID” policies. The migrants are women, men and, in some cases, children accompanying parents from all over China.

Chinese nationals have long made the journey to the United States seeking economic opportunity or political freedom. Based on recent media interviews with migrants coming by way of South America and the U.S.’s southern border, the increase in numbers seems driven by two factors.

First, the most common path for immigration for Chinese nationals is through a student visa or H1-B visa for skilled workers. But travel restrictions during the early months of the pandemic temporarily stalled migration from China. Immigrant visas are out of reach for many Chinese nationals without family or vocation-based preferences, and tourist visas require a personal interview with a U.S. consulate to gauge the likelihood of the traveler returning to China.

Social media tutorials

Second, with the legal routes for immigration difficult to follow, social media accounts have outlined alternatives for Chinese who feel an urgent need to emigrate. Accounts on Douyin, the TikTok clone available in mainland China, document locations open for visa-free travel by Chinese passport holders. On TikTok itself, migrants could find information on where to cross the border, as well as information about transportation and smugglers, commonly known as “snakeheads,” who are experienced with bringing migrants on the journey north.

With virtual private networks, immigrants can also gather information from U.S. apps such as X, YouTube, Facebook and other sites that are otherwise blocked by Chinese censors.

Inspired by social media posts that both offer practical guides and celebrate the journey, thousands of Chinese migrants have been flying to Ecuador, which allows visa-free travel for Chinese citizens, and then making their way over land to the U.S.-Mexican border.

This journey involves trekking through the Darien Gap, which despite its notoriety as a dangerous crossing has become an increasingly common route for migrants from Venezuela, Colombia and all over the world.

In addition to information about crossing the Darien Gap, these social media posts highlight the best places to cross the border. This has led to a large share of Chinese asylum seekers following the same path to Mexico’s Baja California to cross the border near San Diego.

Chinese migration to US is nothing new

The rapid increase in numbers and the ease of accessing information via social media on their smartphones are new innovations. But there is a longer history of Chinese migration to the U.S. over the southern border – and at the hands of smugglers.

From 1882 to 1943, the United States banned all immigration by male Chinese laborers and most Chinese women. A combination of economic competition and racist concerns about Chinese culture and assimilability ensured that the Chinese would be the first ethnic group to enter the United States illegally.

With legal options for arrival eliminated, some Chinese migrants took advantage of the relative ease of movement between the U.S. and Mexico during those years. While some migrants adopted Mexican names and spoke enough Spanish to pass as migrant workers, others used borrowed identities or paperwork from Chinese people with a right of entry, like U.S.-born citizens. Similarly to what we are seeing today, it was middle- and working-class Chinese who more frequently turned to illegal means. Those with money and education were able to circumvent the law by arriving as students or members of the merchant class, both exceptions to the exclusion law.

Though these Chinese exclusion laws officially ended in 1943, restrictions on migration from Asia continued until Congress revised U.S. immigration law in the Hart-Celler Act in 1965. New priorities for immigrant visas that stressed vocational skills as well as family reunification, alongside then Chinese leader Deng Xiaoping’s policies of “reform and opening,” helped many Chinese migrants make their way legally to the U.S. in the 1980s and 1990s.

Even after the restrictive immigration laws ended, Chinese migrants without the education or family connections often needed for U.S. visas continued to take dangerous routes with the help of “snakeheads.”

One notorious incident occurred in 1993, when a ship called the Golden Venture ran aground near New York, resulting in the drowning deaths of 10 Chinese migrants and the arrest and conviction of the snakeheads attempting to smuggle hundreds of Chinese migrants into the United States.

Existing tensions

Though there is plenty of precedent for Chinese migrants arriving without documentation, Chinese asylum seekers have better odds of success than many of the other migrants making the dangerous journey north.

An estimated 55% of Chinese asylum seekers are successful in making their claims, often citing political oppression and lack of religious freedom in China as motivations. By contrast, only 29% of Venezuelans seeking asylum in the U.S. have their claim granted, and the number is even lower for Colombians, at 19%.

The new halt on the migratory highway from the south has affected thousands of new migrants seeking refuge in the U.S. But the mix of push factors from their home country and encouragement on social media means that Chinese migrants will continue to seek routes to America.

And with both migration and the perceived threat from China likely to be features of the upcoming U.S. election, there is a risk that increased Chinese migration could become politicized, leaning further into existing tensions between Washington and Beijing.

Meredith Oyen does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Is the National Guard a solution to school violence?

School board members in one Massachusetts district have called for the National Guard to address student misbehavior. Does their request have merit? A…

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Every now and then, an elected official will suggest bringing in the National Guard to deal with violence that seems out of control.

A city council member in Washington suggested doing so in 2023 to combat the city’s rising violence. So did a Pennsylvania representative concerned about violence in Philadelphia in 2022.

In February 2024, officials in Massachusetts requested the National Guard be deployed to a more unexpected location – to a high school.

Brockton High School has been struggling with student fights, drug use and disrespect toward staff. One school staffer said she was trampled by a crowd rushing to see a fight. Many teachers call in sick to work each day, leaving the school understaffed.

As a researcher who studies school discipline, I know Brockton’s situation is part of a national trend of principals and teachers who have been struggling to deal with perceived increases in student misbehavior since the pandemic.

A review of how the National Guard has been deployed to schools in the past shows the guard can provide service to schools in cases of exceptional need. Yet, doing so does not always end well.

How have schools used the National Guard before?

In 1957, the National Guard blocked nine Black students’ attempts to desegregate Central High School in Little Rock, Arkansas. While the governor claimed this was for safety, the National Guard effectively delayed desegregation of the school – as did the mobs of white individuals outside. Ironically, weeks later, the National Guard and the U.S. Army would enforce integration and the safety of the “Little Rock Nine” on orders from President Dwight Eisenhower.

Three men from the mob around Little Rock’s Central High School are driven from the area at bayonet-point by soldiers of the 101st Airborne Division on Sept. 25, 1957. The presence of the troops permitted the nine Black students to enter the school with only minor background incidents. Bettmann via Getty Images

One of the most tragic cases of the National Guard in an educational setting came in 1970 at Kent State University. The National Guard was brought to campus to respond to protests over American involvement in the Vietnam War. The guardsmen fatally shot four students.

In 2012, then-Sen. Barbara Boxer, a Democrat from California, proposed funding to use the National Guard to provide school security in the wake of the Sandy Hook school shooting. The bill was not passed.

More recently, the National Guard filled teacher shortages in New Mexico’s K-12 schools during the quarantines and sickness of the pandemic. While the idea did not catch on nationally, teachers and school personnel in New Mexico generally reported positive experiences.

Can the National Guard address school discipline?

The National Guard’s mission includes responding to domestic emergencies. Members of the guard are part-time service members who maintain civilian lives. Some are students themselves in colleges and universities. Does this mission and training position the National Guard to respond to incidents of student misbehavior and school violence?

On the one hand, New Mexico’s pandemic experience shows the National Guard could be a stopgap to staffing shortages in unusual circumstances. Similarly, the guards’ eventual role in ensuring student safety during school desegregation in Arkansas demonstrates their potential to address exceptional cases in schools, such as racially motivated mob violence. And, of course, many schools have had military personnel teaching and mentoring through Junior ROTC programs for years.

Those seeking to bring the National Guard to Brockton High School have made similar arguments. They note that staffing shortages have contributed to behavior problems.

One school board member stated: “I know that the first thought that comes to mind when you hear ‘National Guard’ is uniform and arms, and that’s not the case. They’re people like us. They’re educated. They’re trained, and we just need their assistance right now. … We need more staff to support our staff and help the students learn (and) have a safe environment.”

Yet, there are reasons to question whether calls for the National Guard are the best way to address school misconduct and behavior. First, the National Guard is a temporary measure that does little to address the underlying causes of student misbehavior and school violence.

Research has shown that students benefit from effective teaching, meaningful and sustained relationships with school personnel and positive school environments. Such educative and supportive environments have been linked to safer schools. National Guard members are not trained as educators or counselors and, as a temporary measure, would not remain in the school to establish durable relationships with students.

What is more, a military presence – particularly if uniformed or armed – may make students feel less welcome at school or escalate situations.

Schools have already seen an increase in militarization. For example, school police departments have gone so far as to acquire grenade launchers and mine-resistant armored vehicles.

Research has found that school police make students more likely to be suspended and to be arrested. Similarly, while a National Guard presence may address misbehavior temporarily, their presence could similarly result in students experiencing punitive or exclusionary responses to behavior.

Students deserve a solution other than the guard

School violence and disruptions are serious problems that can harm students. Unfortunately, schools and educators have increasingly viewed student misbehavior as a problem to be dealt with through suspensions and police involvement.

A number of people – from the NAACP to the local mayor and other members of the school board – have criticized Brockton’s request for the National Guard. Governor Maura Healey has said she will not deploy the guard to the school.

However, the case of Brockton High School points to real needs. Educators there, like in other schools nationally, are facing a tough situation and perceive a lack of support and resources.

Many schools need more teachers and staff. Students need access to mentors and counselors. With these resources, schools can better ensure educators are able to do their jobs without military intervention.

F. Chris Curran has received funding from the US Department of Justice, the Bureau of Justice Assistance, and the American Civil Liberties Union for work on school safety and discipline.

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Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”

Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…

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Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86. 

So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip. 

Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...

...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each. 

Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse. 

Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:   

In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”

Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act

Rand Paul amid his 10 1/2 hour filibuster in 2015

Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."   

Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support: 

In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience. 

That may be his strongest endorsement yet. 

Tyler Durden Sun, 03/10/2024 - 20:25

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