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.
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?
Vinny
https://theclosingprint.com/CV_Blog/sector-performance-rotation/
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