Traders Scramble To "Explain" Sudden Nasdaq Swoon

Tyler Durden's picture

After surging in early trading, the Nasdasq - together with various cryptocurrencies - suddenly slumped and dropped as much as 1% from its intraday highs two hours into trading. That's what traders could agree with; where they clearly disagreed, was on the reason for the swoon with everything from the velocity of last week’s rally, this morning’s economic data and the Supreme Court’s decision to hear arguments on the Trump administration’s travel ban and being cited according to Bloomberg.

In other words, everyone blissfully rode the momentum on the way up, and now it's time to come up with the most convincing story why there are more sellers than buyers.

Here is what did happen: From a high of 5,845.15 touched at 9:34 a.m. New York time, the Nasdaq 100 fell as low as 5,770.15 at 11:23 a.m., trimming its 2.1 percent rally from last week. Nvidia lost 2%, bringing its three-day drop to 5.3%, while Amazon.com, Alphabet, Facebook and Microsoft each declined more than 2 percent. The Nasdaq Biotechnology Index slipped 0.8 percent, paring last week’s 9.6 percent advance.

Here are the wildly speculative explanations:

  • Yousef Abbasi, global strategist at Jonestrading Institutional Services in New York: “Tech names have lost momentum. I doubt traders care [about the Supreme Court decision] -- algos, probably. They might have seen that headline and decided to de-risk in tech or other sectors it sees as ‘immigration ban’ impacted.”
  • Mark Kepner, managing director and equity trader at Themis Trading LLC in Chatham, New Jersey, says the Supreme Court decision is probably not related: “Utilities are really strong -- I think it’s the weaker durable goods and some of the commentary from Fed officials being not necessarily sold on another rate rise this year. It’s a lower inflation outlook, oil gave up gains too.”
  • Thomas Garcia, head of equity trading at Thornburg Investment Management Inc. in Santa Fe, New Mexico: “Tech has for sure led the way this year and I think some profits are being taken. Depends on how you crunch the numbers as to how expensive or inexpensive some of these stocks are. What do investors value? Earnings, cash flow, growth etc.”
  • Larry Weiss, head of trading for Instinet LLC in New York: “The market has shown the ability to shrug off political uncertainty, so any review of the travel ban by SCOTUS not really driving the market. Volume is light, so spreads are wide, and we would expect to bounce around in a range in the absence of market moving news.”

Source: Bloomberg

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Manthong's picture

 

I know…

..too much sugar.

hedgeless_horseman's picture

 

Facebook, Amazon, Netflix, and Google all down?

Too many people unplugged from virtual reality and went outside to enjoy summertime.

This is what happens when we take a walk around the block to talk to our neighbors, stop in at the corner store, attend a local dance, and ask an old friend what is new and interesting in the world.

Ghost of PartysOver's picture

Why is it so hard to believe that the algo's hunt stops.  They seek out weakness in the order book and attack, much in the same a lion seeks out dinner on the African Plains.

TheSilentMajority's picture

The brokers use their insider info about client stoploss orders to feed their algos.

It is a huge money-printing scam they cautiously employ from time to time to maximize thier profits without raising eyebrows at the SEC.

Mtnrunnr's picture

Fang = bullshit, overbought, overbought/questionable business model, actually decent company. So many other and better companies to invest int

TheSilentMajority's picture

Actually they dont need to sell to bring the "market" down, they just need to stop their masive buying programs for a day.

The SNB Is currently the most significant marginal buyer of USA equities in the world.

GUS100CORRINA's picture

HelloSpencer on Jun 26, 2017 11:56 AM wrote ....

SNB selling?

My response: DAMN RIGHT ... SNB IS GETTING OUT WHILE THE GETTING IS GOOD!!!!!!

American Psycho's picture

Soon reality will meet fundamentals and the party will quickly come to an end.  Or .gov willl just hit CNTL+P.

Too-Big-to-Bail's picture

There must have been some good news announced, which caused the markets to slump in order to balance out all the recent bad news that has been propelling the markets to new all-time highs

J. Peasemold Gruntfuttock's picture

Traders Scramble To "Explain" Sudden Nasdaq Swoon.

Nothing to explain. Move along.

When the hot air holding up the market up runs out you think it floats on its own?

Where are my smelling salts? I need to recover from the 'swoon'.

 

J. Peasemold Gruntfuttock

gold rubeberg's picture

Bingo! An explanation is required whenever stocks are trading well above their intrinsic value. For them to move back to their intrinsic value requires only the absence of the explanation.

mily's picture

Make something up i.e. "nasdaq swooned 1% because of Dudley opened toilet doors with the left hand which might indicate his hawkish", level of absurd goes to 11

pound the vix's picture

Crazy Ivan.  Quick turn around to spook the weak longs and then resume up day with twice the profit.  Brought to you by JP Morgan trading desk 100% profitable every day.

Tyrone Shoelaces's picture

"Traders"  LOL

 

Algo's chasing each other is all this is.

TheSilentMajority's picture

SNB is the market maker.

Only they decide if this rally continues or not.

John Kerry-Heinz's picture

we "human" traders are soo last decade.  insanity is not an issue for AI

Hongcha's picture

Knee-jerk reaction based on theory that cheaper-er immigrant workers at tech companies will be harder to get/retain post SCOTUS decision. 

J. Peasemold Gruntfuttock's picture

Maybe not so fast Hong.

Immigrants are more likely than U.S.-born workers to be employed in a number of specific jobs, including sewing machine operators, plasterers, stucco masons and manicurists. But there are no major U.S. industries in which immigrants outnumber the U.S. born, according to a Pew Research Center analysis of government data.

http://www.pewresearch.org/fact-tank/2017/03/16/immigrants-dont-make-up-a-majority-of-workers-in-any-u-s-industry/

If you were /sarc-ing I defer to your humour.

 

J. Peasemold Gruntfuttock


HominyTwin's picture

They need to draft all green card holders and H1B visa holders into the army and send them to Afghanistan.

RagaMuffin's picture

 

<<<<<< Russians did it, don't know how, but they did

<<<<<< "Fat" finger guy from gold earlier, he's on a roll

the6thBook's picture

Because they pumped it up and I bought calls... then they dumped it... So, I sold and bought puts... now it will go sideways until the puts expire worthless....

TabakLover's picture

Don't care why....but loved it.  I was short 10 Nasdaq contracts.   Boom-chinga-linga!

TheSilentMajority's picture

The SNB digital cash printing press jammed-up temporarily?

Relax Mr. "Market", the SNB will get it working again soon.

CHoward's picture

Oh yeah and it's sunny out - that could always be another reason.

PeeramidIdeologies's picture

Yesterday Peeramidideologies pointed out the gross UNDER Production of all things silicon and aptly referred to it as "sillycon valley".

Market carnage and confusing ensues as all participants are forced to agree, and skynet confirms, this bitch is over cooked.

highwaytoserfdom's picture

 

the FANG   should be FAMG   where NFLX should be replace by Mr Softy

just  extension of Nazi Big Blue make the trains run on time.

 

Can someone  help on putting TWX  out of business...  the only thing they know is

http://www.zerohedge.com/news/2016-07-31/500-years-stock-panics-bubbles-...

south40_dreams's picture

The first great age of digital tech is drawing to a close. Position yourself carefully

ali-ali-al-qomfri's picture

fangs sinking in to inject venom.

it's almost poetic, our demise.

jmack's picture

 

 

   NQ   tried to sell off friday afternoon and was met with considerable buying.  I assume that was people betting that 5770 support had held and we would  be gap up monday, which we were, so they took their profits, and now we are on friday's lows.  standard stuff.

Thebighouse's picture

Gold

Nasdaq

Qatar liquidation.  Not very well done either.

medium giraffe's picture

whatever buy the dip and stfu

HominyTwin's picture

I just sold premium on VIX options. Ridiculous implied volatility. If that many people are betting on a spike in volatility and thus a crash, then a crash ain't coming. Not now, anyways. Probably market will trade sideways until some of those bets disappear.

decentralisedscrutinizer's picture

 

Why waste time on this alligator when the swamp’s most critical economic and political problems revolve around the hegemony of a global corporate cartel, which is headquartered in the US because this is where their dominant military force resides. The US Constitution is therefore the “kingpin” of an all-inclusive global financial empire. These fictitious entities now own the USA and command its military infrastructure by virtue of the Federal Reserve Corporation, regulatory capture, MSM propaganda, and congressional lobbying.

 

The Founders had to fight a bloody Revolutionary War to win our right to incorporate as a nation – the USA. But then, for whatever reason, our Founders granted the greediest businessmen among them unrestricted corporate charters with enough potential capital & power to compete with the individual states, smaller sovereign nations, and eventually to buy out the USA itself. The only way The People can regain our sovereignty as a constitutional republic now is to severely curtail the privileges of any corporation doing business here. To remain sovereign we have to stop granting corporate charters to just any “suit” that comes along without fulfilling a defined social value in return. The "Divine Right Of Kings” should not apply to fictitious entities just because they are “Too Big To Fail”. We can't afford to privatize our Treasury to transnational banks anymore. Government must be held responsible only to the electorate, not fictitious entities; and banks must be held responsible to the government if we are ever to restore sanity, much less prosperity, to the world.

 

It was a loophole in our Constitution that allowed corporate charters to be so easily obtained that a swamp of corruption inevitably flooded our entire economic system. It is a swamp that can't be drained at this point because the Constitution doesn’t provide a drain. This 28th amendment is intended to install that drain so Congress can pull the plug ASAP. As a matter of political practicality we must rely on the Article 5 option to do this, for which the electorate will need overwhelming consensus beforehand. Seriously; an Article 5 Constitutional Convention is rapidly becoming our only sensible option.

 

This is what I think it will take to save the world; and nobody gets hurt:

 

28th Amendment:

 

Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to:

 

1, prohibitions against any corporation; a, owning another corporation; b, becoming economically indispensable or monopolistic; or c, otherwise distorting the general economy;

 

2, prohibitions against any form of interference in the affairs of; a, government, b, education, c, news media; or d, healthcare, and

 

3, provisions for; a, the auditing of standardized, current, and transparent account books; b, the establishment of state and municipal banking; and c, civil and criminal penalties to be suffered by corporate executives for violation of the terms of a corporate charter.

    

PleasedToMeatYou's picture

decentralisedsc...

Copies and pastes here at ZH the verbose rants that he writes to himself. 

...sorta like Bruce Wilds, but without his own blog.

AND, with over twenty 20 pastes in about 6 hours of the EXACT same crap that he's been pasting for weeks now, he's really got some sticky diarrhea. 

montresor's picture

They sold the QQQ when the Supreme Court decision stopped the easy travel for their 5 cent per hour jihadist programmers who are here to pay too much for housing and to vote for the democratic party..  Now that they can't get their slave ships into port, their stocks are off... Fuck em.. The fucking traitors and the democratic party are losing today... Good.

silverer's picture

Anybody bother to ask the ones doing all the trading? "Um, Mr. Algo, can you tell me about what just occurred...?"

NDXTrader's picture

How about funds are overweight tech and it is almost the end of the quarter

Honest Sam's picture

The Weather, obviously.

 

Sorted.