Monday, anybody with market experience knows very well there will be massive margin calls hitting lots of investors.
There is a potential for these margin calls to get to be self-fulfilling.
OTOH, the market will indeed find a bottom somewhere, but please don’t take my comment as meaning that it has to happen this week or month.
The “tell” will be closer to mid-week, when the mar calls have gone out and been met.
The real, real danger the market faces is liquidity. When liquidity dries up, there is giant demand for it. This happened in 1997-8 with the “Asian contagion” -— with the competitive currency devaluations. Under these conditions, stocks can be vigorously sold off. This occurred as well in 2008-—liquidity dried up when banks discovered that all the other banks they were used to lending to were as big liars as the bankers knew every one of themselves was. Nobody was willing to lend. Liquidity became scarce. ULTRA scarce.
This is when you see your conservative JNJ and MRK sold off, because these stocks which kind of just sit there and trade in very narrow ranges become “sources of funds”. Because the margin clerk calls you have sell what you can, not what you want to. And that’s when you see massive index selling.
And of course, this seems to happen concurrently with increased tensions in Korea that the media is absolutely moot about and yes, 99 times out of 100 these things amount to nothing.
After 4 years without a correction, we are indeed due for one. This should come as a surprise to nobody.