..."strategies designed to mitigate risk will actually add to downward pressure in the S&P 500 over the next week as computerized selling ramps up to keep pace with falling prices. It reminds Cheong of the rapid stock selling that roiled markets in August, when the S&P 500 fell 11 percent to a 10-month low while facing similar behavior from algorithmic traders."
...the August 24 plunge was on a Monday (also known as Black Monday 2.0) and took place after Chinese devaluation concerns the previous Friday sent the S&P sharply lower... just like today...
“The bigger the down move today, the more they have to sell, which would basically create a vicious cycle,” Cheong, head of Americas equity derivatives strategy at UBS, said in a phone interview. “We’ll see front-loaded selling in the range of $100 billion to $150 billion over the next two to three days. It could be very similar to August in terms of model-based selling.”
...rebalancing of risk control funds could result in up to $98 billion in S&P 500 selling should the index see price swings of about 3.5 percent or more over the next several days. Risk parity instruments may stir up as much as $30 billion in selling given similar volatility..."
http://www.zerohedge.com/news/2016-06-24/derivative-strategist-warns-150-billion-quant-selling-next-three-days
.
.
Computers vs. Corporate Stock Buybacks
...the August 24 plunge was on a Monday (also known as Black Monday 2.0) and took place after Chinese devaluation concerns the previous Friday sent the S&P sharply lower... just like today...
“The bigger the down move today, the more they have to sell, which would basically create a vicious cycle,” Cheong, head of Americas equity derivatives strategy at UBS, said in a phone interview. “We’ll see front-loaded selling in the range of $100 billion to $150 billion over the next two to three days. It could be very similar to August in terms of model-based selling.”
...rebalancing of risk control funds could result in up to $98 billion in S&P 500 selling should the index see price swings of about 3.5 percent or more over the next several days. Risk parity instruments may stir up as much as $30 billion in selling given similar volatility..."
http://www.zerohedge.com/news/2016-06-24/derivative-strategist-warns-150-billion-quant-selling-next-three-days
.
.
Here’s What Fueled the Rally in Stocks since February: https://t.co/uItlfA7Fuh $SPY $SPX $DIA $QQQ pic.twitter.com/qaKHvo9WAq— Jesse Colombo (@TheBubbleBubble) June 24, 2016
