Massive Market Upspike? (Opposite of a Crash)

[MultiMax]

That fact that an up spike is so rare, says a lot about human psychology

 

[kmiklas]

Fed rate hike is on-the-way.....any thoughts of a "Crash-up" are likely to be doused.

They're already factoring in a 0.9+ probability of a rate increase, so I don't think that it will hit that hard.

 

[ironchef]

BIIB went up 6.7% from Nov 4th to 7th the next trading day and up 15% two trading days later.

A market crash is a black swan. What is this called?

 

[southall]

Big imbalance of long only mutual funds,and most other long term investors only ever go long as well, means fear in the stock market exists mostly on the downside.

 

[W.J. Feathermaker III]

Big imbalance of long only mutual funds,and most other long term investors only ever go long as well, means fear in the stock market exists mostly on the downside.

Traditionally, yes. Nowadays, it's just as likely that some massive quant fund that is long/short a whole bunch of different instruments can get clocked in one asset class and be squeezed in another.

 

[W.J. Feathermaker III]

BIIB went up 6.7% from Nov 4th to 7th the next trading day and up 15% two trading days later.

A market crash is a black swan. What is this called?

"the new normal".

 

[southall]

Traditionally, yes. Nowadays, it's just as likely that some massive quant fund that is long/short a whole bunch of different instruments can get clocked in one asset class and be squeezed in another.

Position limits should mitigate that. But i suppose you could have 10 different funds all short 100,000 ES. Trying to cover in one day.

But i think panic selling is always the more likely trigger as the crowd prefer to be long.

Even some trend following funds that go long and short FX and commodities all the the time, but only ever take long signals in the stock market futures.

 

[ironchef]

I always wonder who were the people who sold in a crash knowing that crashes always recovered if given enough time?

 

[syswizard]

BIIB went up 6.7% from Nov 4th to 7th the next trading day and up 15% two trading days later.

A market crash is a black swan. What is this called?

White Swan event.

 

[southall]

crashes always recovered if given enough time?

Humans don't always have enough time, and the older you are the less time you have.
Nasdaq took 15 years to get back to 5000, thats a long time to wait no matter how old you are.
Nikkei 225 currently more than 50% below 1989 all time high. Almost 30 years.
Euro Stoxx 50 index still 40% below all time high made in 2000.