I think your thinking is common throughout the market at this
time which increases the possibility that such an event could
occur. There is only four triggers needed to achieve such an
event.
1. Complacency (Markets always gap at the open on Mondays)
2. Markets rallying on falling breadth (Been happening for a
long time)
3. Lopsided longs compared to shorts (Shorts closed out each
Friday)
4. Bad news event occuring over the weekend (The final
trigger)
Three of the four triggers are present every Friday! You only
need the fourth event to trigger such a reaction.
Potential triggers;
Carry trade unwinding (already occuring but slowly)
Interest rates spike higher (forming a triangle)
Eurozone PIIGS bad news event (would trigger both of the above
to occur)
Other bad news event (China etc)
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I think your thinking is
Potential for Black Monday Repeat is High
Posted by phillw on 10th of Mar 2010 at 02:59 pm
I think your thinking is common throughout the market at this time which increases the possibility that such an event could occur. There is only four triggers needed to achieve such an event.
1. Complacency (Markets always gap at the open on Mondays)
2. Markets rallying on falling breadth (Been happening for a long time)
3. Lopsided longs compared to shorts (Shorts closed out each Friday)
4. Bad news event occuring over the weekend (The final trigger)
Three of the four triggers are present every Friday! You only need the fourth event to trigger such a reaction.
Potential triggers;
Carry trade unwinding (already occuring but slowly)
Interest rates spike higher (forming a triangle)
Eurozone PIIGS bad news event (would trigger both of the above to occur)
Other bad news event (China etc)