- Quite a few folks asked me this week "is this it, is this the correction we've been waiting for?" My answer: "Probably the start of it."
- Underlying fundamentals and valuations do not match up with the levels of the S&P 500 or Nasdaq, meaning a reversion to the mean is likely.
- Small investors using call options and leverage, while big investors dribbled out of stocks, are a major warning sign.
- Hedge funds hold the edge of the carpet, and if they go short, that will create a significant drop in the market.
- A market correction can be sharp and deep with the Fed less likely to continue pumping their balance sheet after the election.
For further details see:
A Second Wave Correction Could Send Stocks Down 30%