"I think it moved, Jerry!" George Costanza, freaking out.
The SP future is sloshing around its second nesting up day after SUnday/Monday's air drop. The big take away we are getting is, this is the way things are now. A long range-y sideways period and the market came out - this time down -in a violent fashion.
We suggested the Biz News stations do a "Man on the Street" segment and find some of the alleged crazed sellers. The universal question I've received in the last 48 hours has been, "Do you think I should sell, Kevin?" After a friendly reminder that they never asked if I thought they should buy, I suggest not.
The electronic, algorithmic, liquidity cartel that has emerged from the publicly traded exchanges nurtures repricing -up and down - of this character. Mix in an exotic time zone or two and the 23 hour a day Capitalism Casino is populated by bleary eyed addicts, conspiratorial junkies and angry middle aged suburbanites. Wealthy liquidity cartel members remain that way by abstaining from interaction. This is the monster we've built.
The trick is to recognize that the elasticity between market prices and economic reality is stretched by the new system plumbing. Drop a QE central bank regime on top and the connection is nearly lost. The market moved, get over it. It didn't even really trade, it REPRICED. This is the way things are.