If you cheat, money will follow

It's December.

In the first three trading days of April, U.S. stocks rose again.

All walks of life in North America remain optimistic about economic recovery.

Then, week two came: Monday, April 4th.

The North American capital market staged "Black Monday".

Opening time is only ten minutes.

The S&P index quickly fell below 7%, triggering the first layer of the circuit breaker mechanism and suspending trading for fifteen minutes.

This is the sixth circuit breaker in the history of the U.S. stock market and the first circuit breaker during the Sleeping King’s term.

There were 4 times before, it was the achievement of understanding the king

At closing.

The S&P Index fell 7.8% to close at 3703.87 points, a loss of 288 points;

The Dow Jones Industrial Average fell 7.5% to close at .91 points, a loss of 2306 points;

The Nasdaq index fell 8.1%, closing at 1005 points.

The three major stock indexes evaporated 3 trillion U.S. dollars in one day, equivalent to approximately 20 trillion soft currency.

The epidemic is coming to an end and the economy is beginning to recover, but the stock market is going in the opposite direction.

This scene has left everyone in North America scratching their heads. It is completely inconsistent with economic laws and contrary to market common sense.

North American financial media remained silent;

Officials are watching closely;

Smart Wall Street brains still gave a relatively reasonable explanation:

"Panic is not an inexplicable panic, but a panic about the uncertainty of the future."

"In the past year, the epidemic has destroyed the confidence of many people, and it will take a long time to restore this confidence."

"Currently, the market is full of worries. Although the data is not as bad as imagined, there is always a feeling that something is going to happen, and now it is finally here."

February 4-February 7.

U.S. stocks rose slightly.

Market participants seemed relieved.

"Accidental circuit breaker does not affect the overall performance of the market. The market has an internal adjustment mechanism, which will handle and stabilize these negative emotions." SEC analysts said.

The next day, August 4th.

The New York Stock Exchange opens.

The Dow Jones Industrial Index quickly fell by more than 5 points within 2000 minutes;

Five minutes later, the S&P index fell 5%, triggering the second circuit breaker in a week, and the market suspended trading for another 7 minutes.

At the close, the S&P fell 7.81%;

The Dow Jones Industrial Average fell 8.46%;

The Nasdaq fell 7.98%.

Investors are witnessing history for the 7th time. The previous 4 times were the records of the king.

Affected by the circuit breaker in the U.S. stock market, Canadian, Japanese, Korean, and European stock markets fell across the board.

No major global capital market has been spared.

Among them, the German DAX30 index and the French CAC index once plummeted 10%, and then narrowed to 6%.

The European Stoxx Index fell by 11%, the largest drop in history.

The circuit fuse was blown twice in a row, and the Sleeping King couldn't sit still.

He called on investors to remain calm and not to follow blindly.

"Everything is getting better, the economy will recover strongly, the epidemic is steadily under control and continues to improve..."

The stock god also accepted an interview with reporters.

Compared to previous years, he is much calmer.

"I'm not surprised, as long as you stay in the market long enough, this will pass, and I don't think it's anything scary."

Soon the media broke the news that the reason why the stock god said this was because "he has reduced his holdings by at least 50%, and the funds have flowed to Europe and Big A."

Compared with the calmness of the stock gods, some economists have self-doubt.

A Princeton economist frankly denied himself:

"I have no idea what caused these two meltdowns?"

"I realized that I had no idea how the economy worked. I was very ignorant."

"However, I also have areas that I am good at, such as Chinese TV series."

"Although I have never been to China, I have been watching Chinese TV series for five years. I can clearly know the names and professional experience of most of the actors."

"I have already applied to the college to switch careers and teach "Introduction to Chinese TV Drama Research". I will be successful in this field."

Smart Wall Street brains have found the cause of the second circuit breaker from a technical perspective.

A hedge fund manager posted on social media: "I am more worried about quantitative trading than fear and worry about the unknown."

"More than 80% of institutions are now using programmed trading models to conduct stock investments. This kind of quantitative trading only has cold numbers and no emotion."

"As soon as they notice the slightest movement, they will run away without any hesitation."

This manager’s views are recognized by analysts from many institutions including Morgan Stanley, Morgan Stanley, Goldman Sachs, Citigroup, etc.

"Yes, that reason is important."

“We all know that once stocks plummet and the stock index falls, triggering a loss in the net value of the fund’s portfolio, the program trading model will automatically reduce its holdings for hedging.”

"The result is that a large number of stocks are automatically sold off, triggering a circuit breaker."

"These models don't think, they just follow programs."

"The bigger the decline, the harder they sell off."

"Human traders will think about whether the decline in the stock index is excessive? Is there an opportunity for reverse bargain hunting to make profits?"

Goldman Sachs analysts also predicted: "The two circuit breakers indicate that the 12-year bull market in U.S. stocks has come to an end."

On April 4, the U.S. stock market did not have a circuit breaker and fluctuated slightly upward.

Many investment institutions breathed a sigh of relief.

Circuit breakers twice a week, the panic market sentiment should have been completely vented.

The next step should be market consolidation.

Then under the stimulus policy, it continued to rise and returned to normal.

Sure enough, weekend.

The good news is coming.

On April 4, the Federal Reserve unexpectedly announced a 11 basis point interest rate cut to replenish market liquidity.

Then, on April 4, the Sleeping King signed the economic relief bill at the White House and delivered a speech in the Oval Office.

He pointed out that this relief package is very important.

It will help companies and people get out of trouble and embrace a new life.

It will bring unity, stop antagonism and bridge differences.

It will also bring hope to hard-working North American people and inject development momentum into North American businesses.

The two pieces of good news gave the capital market confidence and hope.

Monday, April 4th.

Stimulated by the increase in market liquidity and bailout measures, the market effect... plummeted three thousand feet.

As soon as the market opened, U.S. stocks plummeted, triggering the third circuit breaker since April.

The Dow Jones Industrial Average fell as much as 9.91%;

The Nasdaq index fell 7.56%;

The S&P fell 8.34%.

Technology stocks, financial stocks, and automobile sectors all plummeted.

Among them, star stocks such as Amazon, Microsoft, Netflix, Barclays, and JP Morgan Chase fell by double digits.

Qualcomm was the leader in decline, with its market value evaporating by 1/4 in one trading day.

and so……

The Sleeping King began to explain forcefully: "The market is just a market, it does not reflect economic fundamentals."

"Our economic recovery is strong and everything will come back."

However, investors don't think so.

"The market is going to collapse."

“In just two weeks, all the gains in the past year have been wiped out.”

"As bad as Donald is, Joe continues to make history, very bad history."

More than 70% of investors believe that a fourth or fifth circuit breaker cannot be ruled out within two weeks.

The smart Wall Street brains no longer analyze the reasons and only talk about the status quo.

"Extreme sentiment in the market has formed, and any boosting news and stimulus policies will not help."

"We struggled out of the quagmire of the epidemic, and now we have fallen into the quagmire of economic recession."