May 6'th 2010 Flash Crash Analysis Continuing Developments - Recovery of the Flash Crash - Supply and Demand Publication Date: 09-15-2010 Back to Table Of Contents This is a 1-second chart of the Spyder ETF (symbol SPY) showing the sell-off and recovery on May 6, 2010. We included the tick volume (the count of the number of trades for each second) plotted at the bottom. What this chart shows is that the recovery occurred not due to strong demand, but rather because there were few sellers left. If it were due to strong demand, the volume would have been much much higher. This is a simple matter of supply and demand. Basically, when the shelling stopped, there was no one left standing with good pricing information -- and when the shorts went to cover and buy back stock they found prices rocketing skyward with almost no effort. Inquiries: pr@nanex.net Publication Date: 09-15-2010 http://www.nanex.net This report and all material shown on this website is published by Nanex, LLC and may not be reproduced, disseminated, or distributed, in part or in whole, by any means, outside of the recipient's organization without express written authorization from Nanex. It is a violation of federal copyright law to reproduce all or part of this publication or its contents by any means. This material does not constitute a solicitation for the purchase or sale of any securities or investments. The opinions expressed herein are based on publicly available information and are considered reliable. However, Nanex makes NO WARRANTIES OR REPRESENTATIONS OF ANY SORT with respect to this report. Any person using this material does so solely at their own risk and Nanex and/or its employees shall be under no liability whatsoever in any respect thereof.