What a Week!

That came out of the blue.  The opex forces when market makers are massively short puts is tremendous.  You saw that all today from overnight dumping, to pre-market dumping to the close dumping.  The crowd is bearish but contrarian plays get easily trumped by forced selling, panic, and margin calls.

Will this continue?  Well the charts are completely wrecked, but we got a monster VIX spike, like that you saw in October 2014.   VIX was at 13 earlier this week, and hit 28 today!  That is ridiculous.  Those kind of massive VIX spikes usually occurred within days of a bottom.  Not always a V bottom, but usually a bottom.  Also like December 2014.  Can this market just keep dumping like August 2011?  I don't think so, because you need a financial crisis, and China's debt is mostly internal, and they have shown a willingness to paper over any holes in the TBTF banks.

What this looks like here is an old fashioned panic, based on lower prices causing forced selling and fear.  Since all the support levels have been blasted through this year, there is no guess as to where this market could drop to if we see more panic, perhaps SPX 1900.  Not likely, but definitely possible.