The Closing Print live trading and financial blog during market hours.

R.E.M. Had it Right _ It’s The End!

“It’s the end of the world as we know it (I had some time alone)
It’s the end of the world as we know it (I had some time alone)
It’s the end of the world as we know it and I feel fine (time I had some time alone)
I feel fine (I feel fine)…”

Sarcasm aside, cross currents abound as Black Monday 2.0 grips the markets.

Algorithms had a field day. Short volatility products imploded and everyone seems to be pointing at the velocity of move in 10-year yields somehow sparking this exaggerated swing in a market that hasn’t changed fundamentally. If we step back and listen to all the theories, all we see is speculation.

No one has “the” answer…….

That said, when markets get this crazy, we look at statistics. Algorithms will trade the reverse of this move and that’s statistically probable, given the nature of their programming. Extremes lead to mean reversion.

VIX VXV ratio spiked higher than the 2008 b.ear market. Algorithms know this.

end of the world VIX VXV weekly 1.23

We’ve seen this movie before. It always ends the same way. Historical precedent says we bounce, eventually. So, what this tells you is, don’t do anything stupid. Markets will return to normal, even if CBNC wishes it would stay this way. How else will they get anyone to watch?

Stay calm. The end of the world hasn’t arrived, yet!

Tune in LIVE this morning at 9:20 AM for our take.

Happy Tuesday?


Disclaimer:  Do your Own Research

Our content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on our Website and wish to rely upon, whether for the purpose of making an investment decision or otherwise.

Investment Warnings

We would like to draw your attention to the following important investment warnings. The value of shares and investments and the income derived from them can go down as well as up; Investors may not get back the amount they invested – losing one’s shirt is a real risk; past performance is not a guide to future performance.