PSYCHO MARKETS CRASH, LOW IQ TRADERS BLEED OUT AMIDST A MAELSTROM OF DISTRIBUTION

The tech heavy NASDAQ is leading the fray down the toilet bowl. The Coriolis Effect has affected a wide basket of sectors — with 80% of stocks lower for the day. None have been damaged more than high flying semis and tech stocks, however. The distribution is heavy and the pain for those who top ticked palatable.

Amidst the carnage, it’s important to take note of the mega cap stocks, since they’ve served as hubs of liquidity and profit for our beloved hedge fund industry. The entry into these stocks was extremely accommodative during periods of excess. However, if we’re entering into a summer lull, you will quickly find the funnel narrowing as traders take flight — serving as a noose of sorts for those desperate to get liquid and stem the bleeding.

According to Exodus, there are roughly 100 stocks lower by 2.5%+, whose market caps exceed $10b.

Some are attributing today’s sell off to a ‘rotation’ out of tech into banks and oils. This makes some sense, since the yield curve has recently widened from 78bps to 90bps; but the oil sector is beset by a horrible price of crude. If the price of WTI doesn’t continue bouncing, this entire rally in crude will be revoked inside of a few days, or less.

On the extreme upside is volatility, higher by 40%. That $10 level has been a level of support. In the big scheme of things, the $14 level is still extremely low.

Both UVXY and TVIX are higher, but not nearly as high as one would expect — given today’s monstrous spike in VIX.