Yesterday stocks closed at session lows for a second time this week. To think last year we only saw two session low closes the entire year! What does that tell us?
Last nights $SPY paint brings back memories of years passed. Namely December 17, 2014. On that day over $200 million of $SPY was bought at prices $5 over the offer. It was akin to walking into a car dealership and saying you want to buy that $180 million car for $20 million more than anyone has ever paid for it before...
How quickly things change. After two years of unprecedented and relentless upside action, the month of February has brought a swift correction leaving market participants with a lot more questions than they had just two weeks ago. Has this market finally topped? When will the selling stop?
$VXX fell over $121,000 the last 9 years, a relentless move to the downside that continued unabated until last week. Yesterday after falling a mere $10 $VXX was halted. Go figure.
It is pretty ironic. Even more ironic is that $VXX is supposed to give traders exposure to volatility, yet with volatility at a premium yesterday $VXX was halted. Does that make any sense? About as much sense as halting $VXX during the last $10 of a $121,000 price collapse. I've covered $VXX countless times before. I've even mused 6 years ago that the $VXX and volatility are being killed by the powers that be, to create a market calm designed to re-inflate asset prices. And that plan worked to perfection... until this week.
Did Yellen get out just at the right time? Hindsight is always 20/20, but clearly the market is saying it's romance with Yellen was more than QE deep. Sunday night stock futures were roaring to fresh record highs, this morning the market is crumbling with DOW futures down over 200 points. Of course 200 points in 2018 terms is not as ugly as 200 points in 2009, but its still something we haven't seen often over the last two years.