"Bloodbath" - Dow Crashes Over 1000 Points, Enters Correction | Zero Hedge
Description: Dow crashed over 1000 points today....

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## Stock and bond investors are now paying the price for the Fed’s dangerous experiment

by Vitaliy Katsenelson - Feb 8, 2018 3:14 pm

The Federal Reserve’s changing of the guard has me remembering what it was like to grow up in the former Soviet Union.

## FDA Treats Homeopathy as More Dangerous than Opioids

by TDB - Feb 8, 2018 1:59 pm

The FDA is concerned that people might be spending money on unproven natural cures instead of their FDA approved opioids.

## Buckle Up, It's About to Get Nasty

by Phoenix Capita… - Feb 8, 2018 9:18 am

The bond market is doing the Fed’s job for it.

# "Bloodbath" - Dow Crashes Over 1000 Points, Enters Correction

Dow crashed over 1000 points today....

All 2018 gains are gone...

Time for "Markets In Turmoil" special...

Markets "turmoiled" again today as Treasury yields spiked on a weak auction and the implications of a budget deal that means more supply is coming. This spooked stocks once again and XIV, the Inverse ETF, tumbled at the open - after ramping stocks delusionally into the open. As stocks got monkey-hammered again, so bonds were bid and ended with a relatively small rise in rates as plunges in Risk-Parity funds likely prompted forced delevering in stocks and bonds. Perhaps most notably, credit spreads started to snap wider and rate volatility spiked as equity market contagion spreads.

Investors have swung from "extreme greed" to extreme fear" in a record few days...

Source: CNN Money

While the mainstream media attempts to calm investors that this is a "healthy pullback," one of their pillars of support just snapped. HY credit spreads snapped wider to 10 month wides and even IG spreads spiked...

This should not be a surprise as HY and IG ETFs have seen major outflows...

As credit investors fear rising rates more than anything else...

And the last week has seen huge equity outflows from US ETFs...

And as Risk-Parity funds see one of their biggest crashes in history...

And Risk-Parity had another ugly day today as aggregate bond and stock returns were negative...

So bonds and stocks were sold...NOTE that as stocks dumped, bonds were bid but that never stabilized stock flows...

In cash markets the selling started at the open after a gap up...and accelerated into the close!

Dow's lowest close since Nov 30th

Futures show the chaotic manipulated swings...

All helped by XIV still!!

VIX is back above 35...

As equity vol surged again...

All the major US equity indices have broken key technical support levels...

10% Correction Levels:

- Dow 23954 - Dow closed at 23860 is in correction
- S&P 2585 - S&P closed at 2581 in correction
- Nasdaq 6755 - Nasdaq closed at 6777, not in correction

Financials are now underwater for 2018 (despite soaring rates?) and Tech is also red...

While stocks were slammed, bonds actually ended the day with only modest yield rises (though plenty of vol)...10Y and 30Y yields are up on the week...

30Y Yields reached new cycle highs and 10Y yields tested them...

30Y INTRA

Today's yield spike early on, spooked stocks again...

As rate volatility begins to surge...

The Dollar Index ended the day practically unchanged after rallying overnight (on Asia weakness) and selling off this morning...before rallying back as carry trades were unwound...

But the last 24 hours has seen incredible moves in offshore Yuan... Yuan is 1.3% weaker in the last two days against the dollar - the biggest drop since Aug 2015's devaluation...

Despite the dollar's quiet day, crude and copper slid lower while gold and silver trod water...

WTI was back to a $60 handle and RBOB back at 1.75...

Cryptos were volatile today but Bitcoin ended higher, extending gains from the pre-hearing lows...

Bitcoin held above the $8,000 level but the correlation with VIX remains a worry...

Overheard on CNBC this afternoon - "Volatility is here, embrace it, and we go back up again"

Easy eh?

It appears every asset class is starting to "embrace" the vol..

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## Comments

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JethroBodien Feb 8, 2018 4:03 PM Permalink

Anyone Buy the Fucking Falling Knife (BTFFK)?

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Hammer823 JethroBodien Feb 8, 2018 4:05 PM Permalink

3 of the largest ever point declines in the DJIA happened in the last week.

Hope you’re buying this dip. You know this planned “correction” won’t last long.

In reply to Anyone Buy the Fucking… by JethroBodien

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BaBaBouy Hammer823 Feb 8, 2018 4:06 PM Permalink

Fear Not My Plebes, "They" Keep Selling Paper GOLD, to save your Market and their USD Fiats ~

In reply to 3 of the largest ever point… by Hammer823

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nuubee BaBaBouy Feb 8, 2018 4:08 PM Permalink

It's different this time, because I'm 10 years older.

In reply to f by BaBaBouy

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Mr. Universe nuubee Feb 8, 2018 4:11 PM Permalink

Limbo lower now. How low can you go? BURN IT DOWN!

In reply to It's different this time,… by nuubee

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overbet Mr. Universe Feb 8, 2018 4:13 PM Permalink

Ka Ching Bitches!

https://www.zerohedge.com/comment/11055917#comment-11055917

Ya Im braggin. Fuckin A I suffered for it

In reply to Limbo lower now. How low can… by Mr. Universe

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New England Patriot overbet Feb 8, 2018 4:13 PM Permalink

To be in a correction, don't prices have to be correct?

In reply to Ka Ching Bitches! by overbet

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Mr. Universe New England Patriot Feb 8, 2018 4:15 PM Permalink

-500pts in the last 30 minutes. Gee whiz.

In reply to To be in a correction, do… by New England Patriot

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MK ULTRA Alpha Mr. Universe Feb 8, 2018 4:20 PM Permalink

This is a machine driven crash, this kind of volume means machines are selling.

The machine program for making money going down has kicked in, and mentioned it the other day.

Estimates of 70% of the market is machine trading, and much of it is the new AI robot traders.

Money is being made, coming and going. Retail?, a lot of 401k and other 401 type of accounts can not sell off and are left holding the bag. But these long term holders are still in the money because the froth is selling off.

Another good point, a percent of the sell off is making capital gain, this can only be estimated and proven in tax receipts next year.

And we needed a correction, which builds a healthy foundation.

In reply to -500pts in the last 30… by Mr. Universe

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Occident Mortal MK ULTRA Alpha Feb 8, 2018 4:23 PM Permalink

Enter Saudi Aramco and their $2 trillion IPO.

In reply to This is a machine driven… by MK ULTRA Alpha

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ThinkerNotEmoter Occident Mortal Feb 8, 2018 4:32 PM Permalink

It's not nearly as bad as the bitcoin crash. Don't worry about it. **Most** companies have real assets and products backing them.

In reply to Enter Saudi Aramco and their… by Occident Mortal

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lloll ThinkerNotEmoter Feb 8, 2018 5:03 PM Permalink

Enters Correction = Beginning of Cataclysm

In reply to It's nothing like the… by ThinkerNotEmoter

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Zero_Ledge lloll Feb 8, 2018 5:38 PM Permalink

I don't think this -10% counts as a correction since the +7% in January was such total parabolic bullshit. So really we are only down about -3%. I've got a shit ton of cash ready and will wait for at least another 5% before starting to buy.

In reply to Enters ... by lloll

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Coinista Zero_Ledge Feb 8, 2018 6:30 PM Permalink

Ya should have bought Bitcoin.

Old-bug Losers.

In reply to I don't think this -10%… by Zero_Ledge

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ufos8mycow Coinista Feb 8, 2018 8:16 PM Permalink

I'm gonna make a killing selling T-shirts with "30k By The End of May!" to you guys.

In reply to Ya should have bought… by Coinista

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Crisismode lloll Feb 8, 2018 5:40 PM Permalink

Down 1000 points per day

for the next twenty trading days . . .

Now we're talking Sweet Justice

for the greed, corruption and lust of

Wall Street banksters and their enablers 200 miles south.

If only,

If only . . . . . .

In reply to Enters ... by lloll

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Nature_Boy_Wooooo ThinkerNotEmoter Feb 8, 2018 5:14 PM Permalink

But your retirement is fucked.

In reply to It's nothing like the… by ThinkerNotEmoter

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A Sentinel Nature_Boy_Wooooo Feb 8, 2018 5:21 PM Permalink

At least there’s no discussion about treason in the executive branch of the preceding Oval Office occupant.

In reply to But your retirement is… by Nature_Boy_Wooooo

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Oldguy05 Nature_Boy_Wooooo Feb 8, 2018 5:32 PM Permalink

My retirement's been fvked since I was born.

In reply to But your retirement is… by Nature_Boy_Wooooo

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Lost in translation Oldguy05 Feb 8, 2018 6:46 PM Permalink

Mine, too.

In reply to My retirement's been fvked… by Oldguy05

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countryboy42 Nature_Boy_Wooooo Feb 8, 2018 6:56 PM Permalink

No, it's not. I'm planning on dying while on the job. Bet that scares the shit out of the kid who works across from me.

In reply to But your retirement is… by Nature_Boy_Wooooo

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mailll ThinkerNotEmoter Feb 8, 2018 5:21 PM Permalink

I think bitcoin has established a new norm now, hovering between $6000 and $8500. The dow will eventually find its new norm, whatever it may be and this bubble will have just enough air in it that it needs (unless the people at the controls want it to collapse, which means it will keep going down and down).

In reply to It's nothing like the… by ThinkerNotEmoter

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Oldguy05 mailll Feb 8, 2018 5:31 PM Permalink

That's quite a spread on the norm.

In reply to I think bitcoin has… by mailll

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Sudden Debt ThinkerNotEmoter Feb 8, 2018 5:26 PM Permalink

It's all just fearporn.

The stockmarket is crazy overpriced so any drop below -50% won't affect the real economy.

What it will affect are the zombie companies, the big bigger internationals with PE's that almost 50 to 1.

In reply to It's nothing like the… by ThinkerNotEmoter

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shovelhead Sudden Debt Feb 8, 2018 6:07 PM Permalink

OMG!!!

38 days of gains WIPED OUT!!!

Gotta be the end of the world now, right? I mean, this shits always supposed to go up...forevah?

In reply to It's all just fearporn… by Sudden Debt

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ThirteenthFloor ThinkerNotEmoter Feb 8, 2018 5:37 PM Permalink

Real assets? The sold all that stuff when they went off shore. Then used the free or low cost credit to buy back there stock. Nothing is manufactured in US, we have service economy, the bull shit ‘low cost solution’ that caused the shock of 1987.

One look at the US balance of payments, it would take a fuckin miracle to correct this sinking ship.

In reply to It's nothing like the… by ThinkerNotEmoter

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inhibi ThinkerNotEmoter Feb 8, 2018 5:48 PM Permalink

Do they though? You would be surprised at how many times US companies have completely destroyed their assets over the years, usually to bump the latest CEO/CFO bonus (isn't it great how America rewards corporate pillaging? /sarc).

Most US companies went from full vertical integration to a rented office space with almost no physical assets of any kind. They outsource everything these days, not just manufacturing, but design work, consulting (market research), etc.

Sometimes I just wonder IF America will wake up. I used to think about WHEN, but after 15 years of waiting the only riots I see are of completely useless stupid shit, like taking down some statue of an already long dead white man.

In reply to It's nothing like the… by ThinkerNotEmoter

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williambanzai7 inhibi Feb 8, 2018 6:47 PM Permalink

Don’t forget the pussy hat riots.

In reply to Do they though? You would be… by inhibi

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Save_America1st williambanzai7 Feb 8, 2018 7:52 PM Permalink

yeah...those were good times man....good times...

In reply to Don’t forget the pussy hat… by williambanzai7

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Bunga Bunga ThinkerNotEmoter Feb 8, 2018 5:51 PM Permalink

Like Lehman? It doesn't save the others.

In reply to It's nothing like the… by ThinkerNotEmoter

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BabaLooey MK ULTRA Alpha Feb 8, 2018 4:26 PM Permalink

Turn those AK-47's ON those machineeeeeees Randolf!!!!!!!!!!!!

Mortimer - but that...that that....

Fuck him! Wilson....open fire and don't stop till the gun goes click!

Dammit!

In reply to This is a machine driven… by MK ULTRA Alpha

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JRobby MK ULTRA Alpha Feb 8, 2018 4:30 PM Permalink

"Shafty"
The terrible thing about hell
Is that when you're there you can't even tell
As you move through this life you love so
You could be there and not even know

But you say so what I'm doing just fine
The irony is that it's all in your mind
And that's why hell is so vicious and cruel
But you'll just go on an oblivious fool

In reply to This is a machine driven… by MK ULTRA Alpha

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BennyBoy MK ULTRA Alpha Feb 8, 2018 4:33 PM Permalink

Next stop 23,000

In reply to This is a machine driven… by MK ULTRA Alpha

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bigkahuna BennyBoy Feb 8, 2018 4:39 PM Permalink

This market is about to get Luca Brasi'd

In reply to Next stop 23,000 by BennyBoy

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tokerhead bigkahuna Feb 8, 2018 6:42 PM Permalink

LOL, right when he's getting strangled. His expression in that scene says it all for what the market is gonna do.

In reply to This market is about to get… by bigkahuna

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Livingstrong bigkahuna Feb 8, 2018 8:15 PM Permalink

I hope you are right my friend, looking forward to it!

In reply to This market is about to get… by bigkahuna

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shankster BennyBoy Feb 8, 2018 4:42 PM Permalink

at least...

In reply to Next stop 23,000 by BennyBoy

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PlayMoney BennyBoy Feb 8, 2018 4:50 PM Permalink

For tea and crumpets.....on its way to 21,000

In reply to Next stop 23,000 by BennyBoy

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Bunga Bunga BennyBoy Feb 8, 2018 5:53 PM Permalink

And last stop is 0.0.

In reply to Next stop 23,000 by BennyBoy

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Al Huxley MK ULTRA Alpha Feb 8, 2018 4:41 PM Permalink

Do the machine programs that make money going down work as well as the ones that made money selling vol?

In reply to This is a machine driven… by MK ULTRA Alpha

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UndroppedClanger MK ULTRA Alpha Feb 8, 2018 4:50 PM Permalink

https://youtu.be/UPgS26ZhqZs?t=23s

Couldn't help but laugh.

In reply to This is a machine driven… by MK ULTRA Alpha

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GUS100CORRINA MK ULTRA Alpha Feb 8, 2018 4:56 PM Permalink

My response: With over 500 Billion in margin debt, this unwind could go on for weeks. There is a lot of fuel for the "SELL OFF" fire. Market is now in a "SELL THE RIP" mode versus "BUY THE DIP" mode.

Sentiment has changed and investors are in shock. My guess is the real selling wave has yet to take place. As a side not, market circuit breakers are set at 7%, 13% and 20%. Just wait till the MARGIN CALLS kick in!

This MUELLER INVESTIGATION has to END and END NOW or it will become FINANCIAL ARMAGEDDON. This investigation is BULLSHIT and a real negative news item every single F&^%$%$# DAY!!

In reply to This is a machine driven… by MK ULTRA Alpha

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Bunga Bunga GUS100CORRINA Feb 8, 2018 5:55 PM Permalink

They will construct a rebound so the smart money can get out before the big crash.

In reply to My response: With over 500… by GUS100CORRINA

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CRM114 MK ULTRA Alpha Feb 8, 2018 6:31 PM Permalink

No private investors I know are selling.

Maybe they should be....

In reply to This is a machine driven… by MK ULTRA Alpha

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major major ma… Mr. Universe Feb 8, 2018 4:21 PM Permalink

PPT went to happy hour

In reply to -500pts in the last 30… by Mr. Universe

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CheapBastard major major ma… Feb 8, 2018 4:40 PM Permalink

Obama's 8 years of middle class destruction combined with 24/7 bank bailouts and unnecessary military invasions coming home to roost.

It's anyone's guess how "robust" the reversion to the mean will be.

If the 10-year treasuries get up to 5% then we'll know we're finally getting back to a "normal" economy where people stop the crazy malinvestment.

In reply to PPT went to happy hour by major major ma…

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nuerocaster CheapBastard Feb 8, 2018 5:18 PM Permalink

Will minimal food portions satisfy your standards? I know I'm looking forward to a virtuous career in subsistence agriculture.

In reply to Obama's 8 years of middle… by CheapBastard

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GoingBig nuerocaster Feb 8, 2018 5:42 PM Permalink

read "Sapiens", not only did early humans work a lot less than us (only up to 3 hours a day) but they were a lot happier.

In reply to Will minimal food portions… by nuerocaster

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shovelhead GoingBig Feb 8, 2018 6:12 PM Permalink

Spitting rocks out from my tortillas wouldn't make me very happy.

In reply to read "Sapiens", not only did… by GoingBig

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snr-moment shovelhead Feb 8, 2018 6:41 PM Permalink

you forgot eating every fifth day

In reply to Spitting rocks out from my… by shovelhead

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