This is forced Fund liquidation
Nick Note: The panic selling in equities is mindless liquidation by hedge funds of longs in index funds to cover loses and raise cash because of short squeezes on their heavily-shorted individual stocks like GameStop, AMC and BlackBerry.
When there is fund liquidating, word gets out and everyone tries to front run it. The timing — right at the open — is also a indication of fund liquidation to raise and preserve cash. We saw panic stop loss liquidation into the close as well. Because their trade book was overwhelmed. It usually is a big mistake. My preferred strategy is not to liquidate into a selling panic. I prefer to buy… See i am willing to lose money to make money. Sometimes a LOT of money. I am not a investor but a speculator. A much different job description
Regulators are getting all kinds of calls about market manipulation and a consistent problem lately of brokerages web sights going down. The demand among individual investors has overwhelmed online brokerages, with companies including Fidelity Investments Inc. Charles Schwab & Co., TD Ameritrade and Vanguard Group experiencing slowness or other technical glitches.
Fundamentals do not apply to retail traders. It’s all about momentum. ANd the internet means they call all jerk off online and whip themselves into a frenzy. Their is no need for the regulate rs to do a dam thing. The laws of the markets will soon wipe them out and they will return all the money we have loaned them at leg breaker loan shark interest rates…. Their exotic Italian sports cars and cocaine white mansions will soon be up for auction.
The only reason why Tesla is worth what it is is because people are buying the shit out of the company.” This kind of trading ALWAYS ends in disaster!
Panic liquidation is more like an explosion then a forest fire. A forest fire it rages for weeks on end. In a explosion the smoke clears away in a day or two and the markets revert back to their former state. Which means I like to hold as many positions as possible in market action like this.
I believe the upside is still intact. And stimulus and happy check hysteria along with vaccines are here to save the day hyperblow will drive the markets to new higher highs.
So to be clear here. I want to maintain our bullish spread. I am always a buyer in senseless panic liquidations… Everyone is selling kind of thing. Soon everyone will be buying again and then i am looking to turn our spreads to the bearish side……Nick
PS surprise events like this is part of trading. Their is no way to predict these events a head of time.