I don't think this was a black swan. I do think the severity of the drop was quite a surprise though. I think we're also conditioned to constant BTFDers stepping in and ending any bear party so to see a real continuation of selling for 3 days straight was a surprise within the prior market context.
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Best explanation for today?
- Thread starter Jakobsberg
- Start date
Euro markets (DAX, OMX, FTSE etc) opened lower but nothing crazy. Fairly tight range and no sharp moves all until just after lunchtime which is above 7am in the US. Was the chaos just that the US woke up and clicked on the sell button or did I miss something ?
Liquidations on low liquidity. This guy explains it very well.
"A lot of us"? Lol, you sound like one of the dumb broker sales broads in HK who repeat every Friday (just this time it was a Monday) how some Chinese government body will step in.
yes, a lot of us were expecting PBOC to buy stocks
Why does it matter at all whether the event is coined a "Black Swan"? Should not matter at all.
We will correct a bit but I am steadfastly convinced that we will see more downside, this was the proverbial top the market has put in and the fast selloff reflects how many have realized that this is not just a short term dip. The market has enjoyed paper profits for now 6 years (since 2009) and the end has come. Every party has to come to an end and we will now all pay the price for easy money that flooded even the dumbest ventures and businesses. This is not a China story, it is a GLOBAL STORY, the same has occurred everywhere. We will from now on see how harmful this money injection really is. I will never forget Jim Rogers when he voiced his total disagreement with the decision in the US to flood the market with money rather than weeding out the weakest and starting over with strong businesses. He did not just talk, no, he took his hat, his daughters out of school, and moved to Singapore.
What we need is a much further sell off, it can be slow and controlled, I do not mind. But I welcome this correction and while I do not wish a lot of people to get burned, I do wish that the balloon will explode and all that hot air vanishes.
We will correct a bit but I am steadfastly convinced that we will see more downside, this was the proverbial top the market has put in and the fast selloff reflects how many have realized that this is not just a short term dip. The market has enjoyed paper profits for now 6 years (since 2009) and the end has come. Every party has to come to an end and we will now all pay the price for easy money that flooded even the dumbest ventures and businesses. This is not a China story, it is a GLOBAL STORY, the same has occurred everywhere. We will from now on see how harmful this money injection really is. I will never forget Jim Rogers when he voiced his total disagreement with the decision in the US to flood the market with money rather than weeding out the weakest and starting over with strong businesses. He did not just talk, no, he took his hat, his daughters out of school, and moved to Singapore.
What we need is a much further sell off, it can be slow and controlled, I do not mind. But I welcome this correction and while I do not wish a lot of people to get burned, I do wish that the balloon will explode and all that hot air vanishes.
I wrote this on my journal:
"Its similar to the Chuck Prince chair dance situation. Most of the big players understand that this market is overvalued and its only being held up by central bank policy. Yet they were all invested (sometimes with leverage) because if they didn't it would be fired by lagging the benchmark, thats why even guys like Hugh Hendry decided to 'get up and dance'. They all thought they could get out before the other guy when things started to turn. It did turn and when the key levels were being taken, selling by these players would just keep pilling. You also had the dip buyers being cleaned out too. Of course, it didn't help that HFTs simply vanished. Everybody was trying to get to the few chairs that were available. As a result, you had a quick repricing of the market. Thats my theory anyway"
"Its similar to the Chuck Prince chair dance situation. Most of the big players understand that this market is overvalued and its only being held up by central bank policy. Yet they were all invested (sometimes with leverage) because if they didn't it would be fired by lagging the benchmark, thats why even guys like Hugh Hendry decided to 'get up and dance'. They all thought they could get out before the other guy when things started to turn. It did turn and when the key levels were being taken, selling by these players would just keep pilling. You also had the dip buyers being cleaned out too. Of course, it didn't help that HFTs simply vanished. Everybody was trying to get to the few chairs that were available. As a result, you had a quick repricing of the market. Thats my theory anyway"
yeah that sounds about right, especially the part about managers inability to sit in cash. Just curious, do you have anything in your journal for 8/24 2014 or there abouts?I wrote this on my journal:
"Its similar to the Chuck Prince chair dance situation. Most of the big players understand that this market is overvalued and its only being held up by central bank policy. Yet they were all invested (sometimes with leverage) because if they didn't it would be fired by lagging the benchmark, thats why even guys like Hugh Hendry decided to 'get up and dance'. They all thought they could get out before the other guy when things started to turn. It did turn and when the key levels were being taken, selling by these players would just keep pilling. You also had the dip buyers being cleaned out too. Of course, it didn't help that HFTs simply vanished. Everybody was trying to get to the few chairs that were available. As a result, you had a quick repricing of the market. Thats my theory anyway"