Friday, the markets were chaotic like we have been for 2 weeks now. With every drop of news about the coronavirus, the media turned it into a flaming ball of TNT—weaponizing the news and stoking fear.
After the open, the SPX was down -110 points within the first half hour of trading, mostly from over reacting.
TRADING DAY Until 12:30pm Central
After the opening fall, the market bounced a dramatic 63 points from the lows over the next hour. It gyrated around until 12:30pm Chicago time.
12:30pm to 2pm
As traders came back from lunch, it is rumored that a larger trading firm on the CBOE was being liquidated and for the next 90 minutes, the SPX fell from 2965 to 2901. At the same time, as the rumor goes, the liquidation of the account caused the VIX to run to 54% as a large position in this was being closed.
2pm – Close
With 90 minutes left in the day, the alleged account was totally closed when the SPX was at 2901 and the VIX at 54%. Once this was complete, the market bounced 71 SPX points higher and the VIX fell from 54% to 41%. This is a HUGE swing.
If you were watching the markets at this time, you could not help but notice the volatility and force of the bounce, making the “rumor” of a large account being liquidated seem plausible. On the close, the SPX settled down a mere 51.57 points, the Dow down only 256.50 and stocks like AMD actually closing higher on the day.
In short, it was a nutty day, but nothing we have not seen for the last 2 weeks.
SPX closed down -1.71%
Dow closed down 0.98%
AAPL closed down 3.89 at 289.03 (-1.33%)