why "volatility always came in clusters"? people ask
50% fundies & 50% technicals:
1 fundies/shocking-news triggering the first wave spike
2 people not prepared for the shock, scramble to buy protections
3 sell risky assets
4 rotate to safe-havens
6 which in term trigger the over-leveraged weak-hand longs, hitting stop loss levels & margin calls- 3d wave
7 risk-parity funds portf rebalance due to sudden plunge in risky assets. trimming
#2 of 3
8 60+% of commodity/futures leveraged funds, employing momentum/trend based strategies w/ trend detection & stop-loss levels for flipping to short, got flipped, huge force to the dn side: 5th wave