> - The selloff was triggered by a middle-of-the-road earnings report from Alphabet Inc. late Tuesday that featured a bloated capital expense.
Nobody knows what triggered the selloff, it's a global market with millions of actors doing actions based on numerous sources of information. More than that we come off a peak of hitting SPY500 ~$600 and NASDAQ100 at $20.5k which are all time highs and it's very normal to retrace a bit after - but even that doesn't mean much.
Whenever someone tells you the reason for a stock market move, all they're telling you is what they believe did it, but they have no clue, other than specific critical situations as like, after 9/11 attacks. For company specific "this is why" it's much easier, but even then many times it does the opposite of what the analysts' previous explanation was. They just tell you something because they know people want a "reason".
They could've easily written "after historic rise and new all time highs, some investors take profit" and it'd also be correct.
It's like a bunch of guys looking at a CPU metric in grafana without SSH access to the server or knowing what it's running trying to figure out the cause. Sometimes it pins at 100% and some guy shouts "it's paging to disk", and yeah, might be, might also not.
There was a massive sell off(consolidation) happening from Jun 20th until Jul 2 on the S&P. I know I made some profit off a buy position, but noticed that the trend continuation was taking incredibly long time to start, which is rare in a uptrend. This sell off was already in the works, not to mention sell structure that developed at the top. I wouldn't be so quick to say these things are random. Institutions with billions of dollars don't do things randomly. There was no black swan event this time. It was just time for the over bought market not only to correct but to actually reverse.
This is based on institutional theories or smart money of how price plays out in the chart. I have developing my theory for years using those principles(i.e Wycoff Methods[1]
I did not say these things were random at all, my point is that nobody can explain them because of the complexity - when talking about aggregate movements over time. It's like trying to explain the causal chain of events from a buttefly flapping their wings to a hurricane happening across the world. Or that if one of the twins slept closer to the window and saw the outside they will be more creative.
Regarding the technical impact of institutional moves, that is real, if someone does a huge sell block, you can explain the drop by correlating it, but those are isolated events and it's much harder to predict what the market itself will do than to explain, ah, five minutes ago blackrock did their quarterly rebalancing of their ETFs and you can see it in the chart - that's not what these analysts from these articles usually do, they just come up with something that sounds plausible for clicks searching for a reason.
> Nobody knows what triggered the selloff, it's a global market with millions of actors doing actions based on numerous sources of information.
Using this argument, you can basically discard any kind of inference on any large system. That’s not particularly convincing. It’s not because something is complex that you can’t a posteriori conjecture links between causes and consequences at a macro level.
What economic journalists and analysts mean when they say a move with triggered by something is that both events happened in a time frame which is conductive to saying a correlation exists. Turn out that Google published is earning Tuesday with larger than expected capital expenditure and little return to show for it and then the market tanked. That’s what they mean by reason and that’s how everyone understands it. We know the market is large and made by a lot of actors. We are not dumb.
You are free to think it’s all random happenstance. I’m free to think you have an axe to grind and prefer denial to rational thoughts.
Nobody knows what triggered the selloff, it's a global market with millions of actors doing actions based on numerous sources of information. More than that we come off a peak of hitting SPY500 ~$600 and NASDAQ100 at $20.5k which are all time highs and it's very normal to retrace a bit after - but even that doesn't mean much.
Whenever someone tells you the reason for a stock market move, all they're telling you is what they believe did it, but they have no clue, other than specific critical situations as like, after 9/11 attacks. For company specific "this is why" it's much easier, but even then many times it does the opposite of what the analysts' previous explanation was. They just tell you something because they know people want a "reason".
They could've easily written "after historic rise and new all time highs, some investors take profit" and it'd also be correct.
It's like a bunch of guys looking at a CPU metric in grafana without SSH access to the server or knowing what it's running trying to figure out the cause. Sometimes it pins at 100% and some guy shouts "it's paging to disk", and yeah, might be, might also not.