IMO, the 2/2018 crash was caused by the delisting of the VIX ETN. It created the need for a large unwinding of the future after 4 o’clock that day. It moved from around 17 to 33/34 in 2 large buy orders.
I think we could pull back a bit by the end of the coming week but anyone predicting a crash right now is pissing into the wind and ignoring the current market environment.
Just curious about next reasons for that to happen. What they will invent this time, since the mutation scenario didn't work out. Sorta like watching a tv show, waiting for the next episode (smiles) + Pro Boyz
The easiest excuse would be raising the capital gains tax which is coming soon. Joe Biden has already said he will raise capital gains rates. That would be the catalyst they would cite as the reason. Watch out for CNBC to say that as the reason. Truth be told, the big boys (mutual funds, brokers, banks and hedge funds) can crash the stockmarket tomorrow if they wanted to.
Absolutely. Yet, the reason/explanation is a must, so the farmer Joe from middle Texas/doctor from NYC/or LA teen in mom's basement, would have someone to blame.
Also SPX had moved approx 7% in a month (end Dec/End Jan) so once selling started, triggered as you say VIX ETN being closed out, nearby stops left and right then were being taken out.
I think a correction is definitely coming but unsure of the timing. I do think a drop in TSLA probably starts the ball rolling, but obviously the graveyard is full of smart people who shorted Tesla. Biggest 6 companies are all Tech and account for nearly 25% of SP weighting, so I think we are vulnerable to a large decline by those stocks having merely a normal healthy pullback. TSLA in one the greatest run ups in history still has had a 50% and 30% decline in the past 12 months. I could see a huge up day (say hitting $1000 on Monday) but closing down for the day starting a 10-20% in the market drop. I think with all the Robinhood traders and concentration in tech that any reasonable volatility breakout on the sell side could pay huge dividends. However as Robert Morse says I have not put one dollar into this idea so maybe I don’t truly believe either.
Right re TSLA etc, if it and other large caps have 3 or more red days in a row that would be a potential sell signal along with a VIX spike >30