[Biblebelter]

The minus three hundred point drop today is fairly easy to understand. The two hundred point run up yesterday has to be the head scratcher.

[neb52]

“The two hundred point run up yesterday has to be the head scratcher.”

People betting on that there would be suckers to sell to the next day.

[ThePythonicCow]

The two hundred point run up yesterday has to be the head scratcher.

Not really. Look back at the S&P 500 on May 29 and 30. A large wall of resistance was built up at 1400 to 1405. Then it gapped down on the opening of June 2 to below 1395. The market needed to reach up and close that gap.

That is, it had to shake out those who bought then, and were hoping to get out even, as they were now fearing that this bear market rally had ended, selling to those who were still buying the lows, before the balance of those wanting to sell at market price overwhelmed those wanting to buy at market price, driving the market down.