How do I know? Because I lived through the 1987 crash and this is the same. Go back and look at that crash and see how quickly it bounced back. Why did it bounce back so fast and continue the bull market? Because the crash was an anomaly, caused by computers executing portfolio insurance that failed. The same thing is happening now, but with a different twist.
The results are the same. The market is not working. There is no liquidity. This problem needs fixing. This type of selling must be regulated because the market can’t handle it. The market cannot handle computer driven buy and sell programs because there is a liquidity problem. Whatever happened to the concept of maintaining an orderly market? It needs to be the rule of law.
The buyers are on strike. Why? Because when the market makers and the specialists see a sell program come in, they step aside and let the market drop until the sell program is over. Then, when the sell program is over, they come in and buy the bargains. In the current market, the sell programs are so big and obvious, that all institutional buying has stepped to the sidelines waiting for the bottom to buy. Sell programs + buyers strike = crash.
Since there is this lack of buyers, the shorts are coining money as the sell programs hit the market and the buyers step aside to see how low the market will go. Eventually the sell programs will stop. Eventually the shorts will stop front running the sell programs. Eventually all the buyers will return to buy the bargains, which is what they do at the bottom of every market crash.
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