Anyone have a record of when /VX was up 14% overnight and what happened after? I spent the entire weekend at my old college studying market crashes and there have been a lot of similarities such as oil sending deflationary signals, psychology of the masses, record volume selling on Thursday/Friday, etc.
The same two people never see a rainbow the same way... Finding a similar match still won't match the context.. This will all make sense to many people in many different ways in hindsight.. China, deflation, fed uncertainty... But the more important thing is.. How do you plan on making money on it...
My biggest mistake was in 2008 - underestimating the power of the Federal Reserve. The FED has jaw-boned the market all the way up - on new highs talking rate hikes. On pullbacks, talking accomodative. This sell-off is real. Check the FED balance sheet (toppy for the past several months). They can step in. The crash doesn't come until real rate hikes are underway. You could play the downside until the FED makes strong overtures for another round of QE, then the bottom in this sell-off is in. My 2 cents. Keep in mind this correction (so far) is only 10% off the highs.
Yeah, the S&P is down about 10% from its high including this 3% overnight drop in futures...and who knows if it will get worse or recover when U.S. markets open. There are a lot of issues and potential problems, but we're still in "healthy correction" territory right now. And if nothing else, a dead cat bounce should come very soon.
S&P and Dow futures lose in excess of 2% while Naz more than 4%. But Shanghai slides a whopping 8.99%.
I'm looking for opportunities to short at open...I see this market going down further. I think the story behind this fall is the ultimate failure of QE and Fed manipulation to stimulate growth and recover the economy. The economy has not been able to produce growth, lower unemployment (measured by labor participation), and increase wages (which are all actually related factors) and now the Keynesian central planners are out of tricks. I think those looking to get long will have plenty of opportunity to do so and can afford to be patient. But I hope I'm wrong about all this. Hopefully we get a fast recovery as I prefer to go long than short. But right now, the market is looking for support. More downside to go I'm afraid.
More loans being paid back then new money injected into the system (in the form of QE)? You're right. This sham of a recovery has been QE and deficit driven. That said, doesn't mean they can't restart the digital printing press...
Yes, but at what point will they lose credibility? Every junkie has his / her day of reckoning. If they could indefinitely deliver economic prosperity for all by continuous money printing, they would probably do it. Unfortunately, it's not sustainable.