Ibex 35 in August 2012: The Stock Market Went Dark for Three Hours

The Ibex stopped trading for three hours on August 6, 2012

At 10:09 AM on August 6, 2012, the Spanish stock market ceased trading. It wasn't for minutes: it was a halt of over three hours, with a failed attempt to resume trading around noon and no official explanation beyond a brief "technical problem." When the trading floor went dark, the Ibex-35 was up 0.25%. When it returned, the index had for months been the thermometer of a country financing itself precariously, and that blackout would be read as an uncomfortable metaphor: the heart of the market had stopped working.

It wasn't just any day. The government had just banned short selling to curb speculative attacks, the risk premium was hitting year highs, and half of Spain was awaiting the word "rescue." All of this fits into four weeks of conversation about prices, levels, and rumors.

Banning Shorts and the Market's Punishment

The ban on short selling, presented as a defensive shield, became the first object of ridicule. The official logic held that if the stock market was falling, it was due to short sellers; the market's response was to fall just the same with shorts banned. When the index started in positive territory, the irony was inevitable: where were those who had called for the ban?

The technical argument had nuances. With short positions prohibited, inverse ETFs became the escape route for those wanting to bet on a downturn, and several observers pointed out that these products, registered in Paris, were outside the veto. The feeling was that of a regulator blocking the emergency exit while the building continued to burn.

The Technical Halt No One Explained

The three-hour interruption exposed the official narrative. Reuters reported that "technicians were still working to solve the problem after a failed attempt to resume trading around midday." No further details were provided.

There was no shortage of dark humor about the intern alone facing the crashed server, nor irony about an index abandoning its role as a thermometer. Some even wrote its epitaph: "Ibex 1992-2012. From index to junk stock." For those who traded daily, the halt was more than an anecdote: it left everyone without liquidity and those with open positions without the ability to react.

Bankia, From Rescued Bank to Junk Stock

Bankia occupied a significant part of the month. The entity, already intervened, was discussed as a "junk stock"—a cheap stock from which a few pennies could be made in the short term—and at the same time as a scandal worthy of incivil investigation. The irony about "Hispanistani-style" investigation committees summarized the distrust towards any accountability.

The technical calculation prevailed over the sarracena one: with the bank at knockdown prices, more than one person admitted to buying in to grab a few euros. The underlying question—how much of the fall was business and how much was disaster—remained unresolved.

Those Who Buy When There's Blood in the Street

Amid the panic, the month saw two gestures from big money. Marc Faber announced he had bought European stocks "for the first time in his life," with Spain, Portugal, Italy, and France in his sights, although he warned that "the problems in Europe are a lifetime away from being solved."

The other move was more domestic: Alicia Koplowitz entered Ferrovial and multiplied her investment in Iberdrola through her investment fund. The reading was clear: while the small speculator watched the chart minute by minute, patient money accumulated. A contrast that fundamentally described the entire market.

Fibonacci Levels and the Analyst's Pulse

A good part of the month was a battle of levels. The 6,530-6,550 area appeared as a reference for the 38.2% Fibonacci level; 7,340 as a short-term target; 7,000 and 6,900 as supports that, if held at closing, kept the bullish scenario alive. The preferred scenario depicted an explosive trajectory: 7,340, then 6,650, then 6,900, and at the extreme, 5,400.

The most technical analysts discussed the volume of "big players"—the large ones—with forensic precision: someone had placed a buy order for 5,987 contracts at 5:30 PM on July 24, and that was the source of all subsequent rises. The peak balance was made on August 1; the minimum, weeks earlier. The dominant theory: when strong hands want to move, they create a false pull to shake out the small players before executing their move.

The Hook of Rumors: Merkel and Greece

Aside from the charts, the market moved on headlines. A rumor that Merkel was considering easing the Greek bailout plan was enough to trigger an upward surge mid-month. The head of the Eurogroup, Jean-Claude Juncker, fueled hopes of giving Greece more time while Samaras asked for "a little breathing room."

In parallel, the certainty grew that Spain's formal bailout would arrive at the end of September, and with it a possible sell-off: if the ECB bought two-year bonds, the need to hold other assets in portfolio would disappear. The date was on everyone's lips. No one was certain.

Flowing Money: Apple and the Inflation Thesis

The end of the month turned towards the big question: why had Apple added $100 billion to its market capitalization in one month. Fundamentalists cited margins above 40%, zero debt, and a $100 billion cash pile. Skeptics countered that it was merely incoming money flow.

Beneath it all floated a larger thesis: that all this money would end up in inflation, because "the basis of today's money is to generate inflation to steal from the small and allow the big to reduce their debts." Some warned of an S&P at 1,800, 2,500, or even 3,000 in the next bubble.

The Anecdote of the Bills with an X

Amid the vertigo, a curious detail: a participant recounted hosting Korean friends who noted that all the 10, 20, and 50 euro banknotes they brought began with an X, the code for Germany. They had exchanged the money in Seoul. The anecdote circulated as a reminder that money also has a nationality, and that strong bills don't always travel in the expected direction.

It was August 2012. The stock market went dark for three hours without explanation and then resumed operations as if nothing had peine.