- Aside from the fact that panicking and trading are never a good combination, which is why we design trading plans, last Friday’s global stock plunge may turn out to be just another in a line of overreactions from algo traders.
- Of course, a bear market could start at any time. And whether it’s algos or people who do the selling, anytime the market falls and you own stocks, the odds of losing money rise.
- Options traders turned bearish at 4700 on SPX and near the 470 area on S&P 500 ETF Trust ETF (SPY), as evidenced by rising put option activity and the subsequent hedging. As a result, stocks rolled over on Friday’s option expiration.
For further details see:
Is It Time To Panic? How About Just Sticking To Your Trading Plan