Bank Of America: "If It Doesn't Bounce Now..."

Zero Hedge | 5/6/2010 | Staff
hubbog (Posted by) Level 3
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On Thursday evening, we explained why to many traders the violent selloff observed on over the past two days had peaked: at exactly 2:43PM on Thursday, the NYSE was hit with a monster selling order perhaps the result of a last hour margin call.

As measured by the NYSE TICK, or uptick minus downtick, index, the selling flood was so massive it not only surpassed the acute liquidation that was observed around 3PM on Wednesday, but the -1,793 print was one that had not been seen for 8 years: this was the lowest reading since the May 6, 2010 "flash crash" when liquidity dried up in markets, sending the market plummeting for a few minutes, as HFT briefly went haywire.

Peak - Capitulation

More importantly, it also may have signified the peak of the current capitulation.

Interestingly, the question whether the liquidation is finally over is also the topic of Michael Hartnett's latest Flow Show, titled appropriately "If it doesn’t bounce now..."

Hartnett - Selloff - BofA - Global - Breadth

According to Hartnett, after the recent selloff, the BofA Global Breadth Rule has been triggered as 89% of MSCI country equity indices 10% price decline); 1557 global stocks out of 2767 in MSCI ACWI in bear market (>20% decline); ACWI equal-weighted global equity index -17.9% since asset prices “big top” late Jan.

Meanwhile, going back to his bread and butter i.e., tracking fund flows, Hartnett observes that we just saw another week of...
(Excerpt) Read more at: Zero Hedge
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