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/1 The $VIX Decline
#equity MARKETS DECLINED
$VIX DECLINED
What is going on?
Liquidity Problem
LIQUIDITY PROBLEM
Just like the buyback charts I have been posting that show there is a liquidity problem...
Overloaded Participants
Participants were overloaded with $VIX contracts… twitter.com/i/web/status/1…
#equity MARKETS DECLINED
$VIX DECLINED
What is going on?
Liquidity Problem
LIQUIDITY PROBLEM
Just like the buyback charts I have been posting that show there is a liquidity problem...
Overloaded Participants
Participants were overloaded with $VIX contracts… twitter.com/i/web/status/1…
/2 Selling and Unrecoverable Losses
Those with enough capital left SOLD THE FRONT MONTH CONTRACT AND ROLLED TO THE NEXT CONTRACT...
Those whose $VIX contracts represented unrecoverable losses sold price indiscriminately...
Those with enough capital left SOLD THE FRONT MONTH CONTRACT AND ROLLED TO THE NEXT CONTRACT...
Those whose $VIX contracts represented unrecoverable losses sold price indiscriminately...
/3 Impact on Liquidity
IN EITHER CASE THIS HUGE AMOUNT OF LIQUIDITY THAT WAS TIED UP EXPECTING A $VIX SPIKE WHICH MOST ARE NOW GOING TO MISS IS GONE...
And that leaves a lot less liquidity for the markets...
IN EITHER CASE THIS HUGE AMOUNT OF LIQUIDITY THAT WAS TIED UP EXPECTING A $VIX SPIKE WHICH MOST ARE NOW GOING TO MISS IS GONE...
And that leaves a lot less liquidity for the markets...
/4 Liquidity Killer: $DXY
This brings me to another subject and liquidity killer: $DXY...
Most institutions do not like to short, so when they think they need to reduce risk, they BUY DOLLARS...
This brings me to another subject and liquidity killer: $DXY...
Most institutions do not like to short, so when they think they need to reduce risk, they BUY DOLLARS...
/5 Amplifying Selling Pressure
As markets drop, they will buy $DXY, thinking it's lowering their risk when, in fact, because $CHF $GBP $EUR $JPY will be stronger against the dollar…
So they will end up selling the $DXY the bought at a loss
And selling #equities because their… twitter.com/i/web/status/1…
As markets drop, they will buy $DXY, thinking it's lowering their risk when, in fact, because $CHF $GBP $EUR $JPY will be stronger against the dollar…
So they will end up selling the $DXY the bought at a loss
And selling #equities because their… twitter.com/i/web/status/1…
/6 Importance of Understanding Liquidity
It's very important to understand everything is eating liquidity...
We just killed the best traders who shorted...
We just got those same traders long...
We just got a bunch of other amateurs long...
All at the top - LIQUIDITY DESTRUCTION… twitter.com/i/web/status/1…
It's very important to understand everything is eating liquidity...
We just killed the best traders who shorted...
We just got those same traders long...
We just got a bunch of other amateurs long...
All at the top - LIQUIDITY DESTRUCTION… twitter.com/i/web/status/1…
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