January 28, 2019

More volatility could lead to a Flash Crash

US Stocks may have made its highs for the short term and there is the possibility of a "Flash Crash" according to Doug kass.

The market’s market structure (and limited natural price discovery) means that equities will increasingly moves to extremes, in a new regime of volatility (which will likely continue until there is the next significant “Flash Crash”). And the list of possible outcomes (many of them adverse) has never been higher in an increasingly flat and interconnected world.

Excessive pessimism and poor price action contributed to a Christmas Eve low which provided an opportunity to go long.

Excessive optimism and good price action is now contributing to a late January high which might be providing an opportunity to sell stocks.

via realinvestmentadvice