Forced Fund Liquidations: Stocks Slammed By Barrage Of Massive Sell Programs

The US equity markets are being hit by an onslaught of significant sell programs today, suggesting forced fund liquidations.

The surge at around 1330ET was the 3rd biggest sell program of 2018 and with each new flush, stocks are making news lows…

As we noted previously, you are witnessing a massive culling of the hedge fund industry as hundreds of funds are liquidated and thousands more get sizable redemptions. Many of these funds own the same companies—the outcasts from the indexed world, the cheap, the unloved; the same stocks that many other hedge fund managers own. With the hedge fund industry going in reverse, there is suddenly no natural buyer for what must be sold. As a result, you are seeing waves of forced sell orders and few buyers (which for those so inclined, is creating good bargains all around).

However, do not be too concerned as CNBC’s Bob Pisani noted, “this is just an ol’ fashioned buyers’ strike.”

While they may be on strike, they are not shy about buying protection (VIX soared above 25)…


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