Quote:
Originally Posted by lewdog
The media has been pandering for a "correction" or "bear market" for 1+ years. Get a few days of investors taking profits off the table and people start seeing these selloffs as the peak of the market and the signaling of impending doom. It's a snowball affect. Does anyone think it's partially related to the amount of media and social media affect that so many see today on the markets? I really can't explain how this snowballed so quickly this week so that's just a thought.
The selloff was expected, but not at this type of weekly level. It's pretty crazy to say the least.
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This isn't mere profit taking. This is a mini-crash. This has very little to do with social media and more to do with Wall St. being too smart for it's own good.
Yeah, we were due for a correction. But the violence is being triggered by things like the XIV and other VIX related derivatives that triggered the violence behind the selling.
Those derivatives triggered massive selling because of their piss-poor design. Once that started, that started triggering other selling via stops being hit, etc., etc. I am not a huge Jim Cramer fan but he nails this well on why this is happening the way it is.
There is no fundamental reason for the sell off to be this violent. But now because it has gone on for a few days, people are starting to fish for reasons that there might be some fundamental change. It's like a vicious cycle...it just starts feeding on itself.
More violent selling will trigger retail investors, people like you and me, to start selling which will exacerbate this even more.
And why? Ask yourself what is going on economically to justify such a panic?