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A Half-Trillion Dollar Sell Flow (Hypothetically)
Things better stay calm.
If you're looking for a four-word summary of everything I've written here
This is a good article–thanks H!
There will be absolutely no (significant) fiscal policy or monetary policy restraint between now and the mid-terms. Especially since those two policy groups are in the midst of a merger.
Anyone grab that $5 discount on SPY yesterday? Well, it seems somebody did. Have a nice day.
actually, I did, more or less. I subscribe to a SPY mean reversion signal publisher, and we set a long (SPXL) limit order Tuesday at 215 where we caught the dip, and got out this morning at the open around 218.
So the vol-driven algos do start to pull back their risk-on allocations when moves to the upside trigger some parameters in their coding. This is the first time I’ve seen this laid out so clearly. Thank you so much for writing it.
I’m seeing rotational pain over all my trades. Yesterday 10% down, today right back to normal. No clarity anywhere.
For about a month, I’ve been thinking the conditions for a 1987 style “Oct surprise” were in place, the only thing needed was a catalyst. Of course sometimes catalysts never come. That said, I don’t think the bulls would give up that easy, meaning, like in April, the rally would make a meaningful comeback if not resume new ATH every other day. The AI Bubble game of musical chairs feels more like the 7th inning/1999/2006. Also next year banking deregulation should take effect driving bank earnings materially higher in a hysterical grab for unmeasured risk and return. The skewed risk taking of bank will be like nothing any of us have ever seen, not even the GFC.
But when has excessive bank risk taking ever ended badly?
Next week is looking interesting now. NASDAQ broached 2.5%
Japanese politics as the initial catalyst?