Wipeout? Or Healthy Pullback?
Summary
- Black Monday hits markets.
- The trade weighted dollar's effect on oil and commodities.
- The petrodollar's effect on oil and commodities.
Monday 8:30AM EST - Black Monday goes viral hitting every global market, Asia, Europe and South America. SP500 Futures down 70, DJIA -650, Nasdaq hit the -5% limit…
Optionsxpress login page: "Customer service alert. Please note we are currently experiencing prolonged hold times due to market volatility. We appreciate your patience and apologize for any inconvenience."
Prices were mismarked... Retail was shut out... Intraday margin on futures was halted on TDAmeritrade... Bid/ask spreads were wide enough to destroy those facing margin calls. TDAmeritrade crashed, the website and app were down.
Over at a financial forum... many commented it was like a flash crash, how bad was it? "had a 16 call on VXX which showed a 14K profit. I changed the trade 4x and couldn't get it filled. I tried to back out of my puts, could get nothing done. And no one is talking about this gross manipulation of shutting down the trades. I've lost multi thousands... No problem trading your losses, but try to get your winners done is absolutely hopeless."
The VIX touched 51, SP500 1867, then the algos bounced. This isn't a surprise, but it is one month early on the Sept seasonal slowdown which is where we suspected it might start. Is this just a long overdue healthy pullback? TBD.
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