A 3% Drop Is All It Takes...

Tyler Durden's picture

A 2.8% drop in stocks is all it takes...

...to convert sheer near full euphoria into outright panic...

Source: CNNMoney

Quite a collapse in confidence for a 'blip' in stocks... (NOTE - this collapse in sentiment is bigger and faster than the plunge in Aug 2015 following China's devaluation and the US flash crash)


At the same time, the 'plunge' in stocks has hammered BofAML's Global Panic-Euphoria index out of 'Euphoria'...

On a global basis, put-call ratios signal less euphoria than a month ago, and volatility has risen, taking Global Risk-love indicator from a protracted period in euphoria to barely inside the neutral zone.

With most of CNN's Fear & Greed factors suddenly flashing "Extreme Fear"...


But there's just one big caveat - almost 40% of the S&P 500 members are now trading below their 200-day moving-averages...


And that is what years of Central Bank conditioning does for investors' risk appetites.

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Haus-Targaryen's picture

Someone is going to come out and club the VIX and this show continues another day. 

Battleaxe's picture

A 3% dip will never be allowed to happen!!

ejmoosa's picture

Cheaper to print, buy and support than to deal with the aftermath...so far.

JRobby's picture

FED, CB's keep buying.

PPT, ready at all times to buy and buy big.


garypaul's picture

Yeah but if a 3% drop results in an extreme fear reading, that means the market is ready for a bounce. In other words, all this article really stated is that "the market can only go down 3% before it's time for up again".

How the dum-dum readers interpret this article is up to them.

ReturnOfDaMac's picture

What does it mean, should we buy gold instead?

Goldbugger's picture

A 4% drop will really get things going to the downside.

lester1's picture

There will NEVER again be another financial crash because the Fed and other central banks will always be there to buy stocks. Whats to stop them??

BullyBearish's picture

what's to stop the central banks from keeping the market rising?  when the last buyer is in then there is MUCH more money to be made crashing the market...happens every time...

GlassHouse101's picture

Complete loss in (USD) confidence.

Hal n back's picture

a) a selloff will eliminate one bragging right for Trump

b) the jobs numbers appear to be too good to be true--so sometime soon we get teh adjustment perios-another bragging right for Trump taken away.

This is part of the coordinated approach to get rid of Trump, and at the same time severly reduce the likelihood anybody in the future will take on the establishment.

They just pound on you and your family till you throw in the towel. Even those you thought were friends abandon you.


While Trump has endured thus far, give him credit, however, he and Congress are stil not coming close to addressing the real problems. There is just no apetite for that in DC.



Consuelo's picture



Great supposition, and question.


Unless one is of the Brandon Smith school (where the entire globe is in on the gang-bang and all of what we witness in geo-economics and geo-politics is a carefully crafted stage play), then U.S. foreign policy remains the lynch pin.   And I'd offer that lynch pin is awful rusty.

pkea's picture

did you hear about the debt levels, planned rate hikes and leverage?

XAU XAG's picture

@ lester1

This market will be diving in 1-4 weeks

The Charts say so

You will get your answer sooooooooooooooooon



ReturnOfDaMac's picture

But Janet said, never again in her lifetime!  She's in her 70's?   Oh wait ...

GodHelpAmerica's picture

At this point Breadth highlights how the indexes are now only being supported by the stocks the central banks are buying.

Uncertain T's picture

All the CB's need to buy is the stocks that will have the most impact on the index. 

spastic_colon's picture

yes your comment being mostly supported by S&P Indices own study that shows the top 11 companies rep 20% of the returns.....and the top 20% rep almost 40% of the returns.

rayban's picture

Turnaround Tuesday....

Bay of Pigs's picture

Followed by Reach Around Wednesday.

Consuelo's picture



Well I guess at least we get that, right...?

Ben A Drill's picture

We are at the cusp of running out of other people's money.

Seasmoke's picture

Exactly the reason the manipulating criminals are buying today. They must. It's very simple. 

Catullus's picture

Time to not have stop losses in place. They're going to run them on you

armageddon addahere's picture

I've switched to buying  protective puts. As present positions run out will go to calls instead of married puts.

Ink Pusher's picture

2,271.31 Jan 2017   

2,428.37 Aug 2017

1,484.46 Dec 2007

mrjinx007's picture

So inflating asset prices is causing deflation?  It's like new math.

White Knight's picture


Bemused Observer's picture

Let me ask some of you this question...


With all the 'technification' of the financial system, could we ever arrive at a point where the system 'locks up' because the automated systems are unable to execute the orders given because the math just doesn't work?

Markets are numbers, real numbers that generally have to match up with all the other numbers, or eventually that checkbook just will NOT balance. Everything you try to write after that will just bounce...you will be 'locked-up', unable to function until something material changes in your world. But we have always had a little flexibility built into the system, because everything wasn't 'tied in' and running at light speed. Remember when you could 'tweak' a day or so extra out of your paycheck by 'kiting' a check? No money in the account on Friday, but you know your pay will be there on Monday. So on Saturday you write a check, with a little extra out in cash, to get you through the weekend. Since the banks didn't do anything over the weekend, you were good, as long as that money went in on Monday. Now, you'll be overdrawn for 3 days because everything happens RIGHT NOW, and all the moving parts of this technique will crash immediately into each other.

An automated market can't be flexible like the old human-run ones were. So, if things converge at a place where the numbers just don't work, would things just freeze-up, in a chain-reaction freeze-up of the entire system? In the old days, the system would agree to 'look the other way' for a day or so, and let me catch up. Nowadays there is zero flexibility, and I'm either going to pay hefty overdraft charges, or go without for the weekend.

So what happens in our current system when enough individuals and entities are 'locked down', and cannot proceed?

Grandad Grumps's picture

Fear does not compute. AI knows no fear.

CaptOveur's picture

It's interesting who is calling the top. ZeroHedge always does but CNN??? Minds must have changed.

Bernie Madolf's picture

I really thought they would use Trump as their patsy for the next market collapse. After last night giving the MIC a blank check and a rimjob, I'm not so sure.

DC Beastie Boy's picture

Zerohedge wants this market to drop so bad, it's uncanny the amount of artilcles written about this.

It's not going to drop because it's not a market.  There's unlimited liquidity with algos running the show.

I've seen hundreds if not thousands of these articles written on here.

This site wants a stock market crash more than anything.

Not going to happen.