The recent market crash- its all about The Velocity

N

NY_HOOD

we were at all time highs about 3 weeks ago and since then have dropped about 30%.
The dow is down almost 10,000 points in 3 weeks. The velocity of this drop is absolutely astounding. We will have violent swings to the upside which will draw investors back into the market only to be hammered by more selling.
Another thing. As i mentioned thursday, the 50 dma hasnt even crossed below the 200 dma yet. Every bear market we had results in that infamous death cross.
 
People, especially talking head types, also love numbers and squiggly lines. Draws the eye.

Traders meanwhile love percentages and looking beyond the headlines and obvious.
 
No one has mentioned what those deep OTM puts went for in mid-Feb and what they are worth now. Here is one example. Mar20 3000p. 3.50-4.50 in mid-Feb. to over 600.

ES_Mar_3000p.jpg
 
the dv/ds worst case is the spot in usd terms. anywhere you have vega the volatility would damp the change in price relative to the undelying in outright usd. so if you saw moves like when it is 1d on the right for an option with vega, you know its a mispricing.
 
so if you had say an atm option that was 400 then 500 you would need a 200 point drop if it then went back up 200 points you would get back to 475 so its very smoothed. you can quickly see whats going on
 
Well call it the Corona Virus Death Cross which S&P officially had today.

Meanwhile Dow had their 50/200's cross two weeks ago today.

Thought the lagging indicator crowd would like to know.
 
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