Credit market in freefall...

D

DisciplinedHedg

A contributor on RM is saying that the credit market is in freefall today and trading like the dow is down 500.

Spreads must be widening quite a bit. This may weigh heavily on the market the whole day, yet there is no mention.

Does anyone here follow the credit market and have insight?
 
Why is everyone saying fat finger?

The credit market and forex market were down SIGNIFICANTLY when the Dow was not even down 100 points.

When the losses and volatility carried over to the equities market, the futures took hold and took the market down fast.

Add the stop losses and panic selling, and this does not seem accidental at all.

Look at the chart. It is a waterfall decline indicating that selling begets selling. It wasn't a single out of nowhere drop.

Nor should their be an investigation. That would truly be a waste of resources.
 
The market is broken, run away. Interesting you said credit was taking it on the chin in the am, I was short LQD and it didn't start moving until 2:30pm. :confused:
 
I think there was a gap down at the very bottom that was a fat finger. But the day as a whole was obviously no mistake.

My swing trading stock system (which constitutes very little of my trading) moved me mostly short mid-session 2 days ago and then all short on open yesterday. So at least in my view of the world there was plenty of evidence that this was in the works.
 
Quote from The Big D:

I think there was a gap down at the very bottom that was a fat finger. But the day as a whole was obviously no mistake.

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I don't think the furious tail down at the end was a fat finger.

It was clearly liquidation. I know several people who had positions automatically liquidated near the bottom. Some earlier than others, but it must have happened to quite a few today.

Add in put sellers as well that have been coining money up to today.
 
Quote from DisciplinedHedg:

I don't think the furious tail down at the end was a fat finger.

It was clearly liquidation. I know several people who had positions automatically liquidated near the bottom. Some earlier than others, but it must have happened to quite a few today.

Add in put sellers as well that have been coining money up to today.
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IMO the situation around P&G is very hard to explain without a fat finger or some sort of error. I could see some two bit stock going to $0.01 because of legitimate (if dim-witted) system trading, but P&G has too much market making activity around me to believe the move we saw is legitimate.

If the verdict comes down that there was no error, so be it. I profited by this and can't complain. But I won't believe it without hearing from an exchange official. And if this was legitimate market behavior, I'll certainly revise my (already pessimistic) beliefs about what can happen for no good reason.
 
The junk bond market was down 0.87% on Thursday per the proxy for junk bonds - the Merrill Lynch High Yield Master II Index. One of the worst days over the past 12 months but hardly of crash proportions. Bond commentators often look at the performance of the junk bond ETFs such as HYG or JNK to judge how junk bonds are performing but that is a very inaccurate picture of how junk bonds are actually trading as the ETFs can go to huge discounts (as occurred Thursday) due to a crashing stock market and panic among traders.
 
that is what you get for pumping the market with no volume. classic pump and dump. market gapped on no volume

free fall to support gaps down on no bid. today was gapping and gapping and still no bid. an cancel bids. or market sell orders

Quote from 007Arb:

The junk bond market was down 0.87% on Thursday per the proxy for junk bonds - the Merrill Lynch High Yield Master II Index. One of the worst days over the past 12 months but hardly of crash proportions. Bond commentators often look at the performance of the junk bond ETFs such as HYG or JNK to judge how junk bonds are performing but that is a very inaccurate picture of how junk bonds are actually trading as the ETFs can go to huge discounts (as occurred Thursday) due to a crashing stock market and panic among traders.
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