Midnight Plunge: World Hits the "Sell-Off Button"

Deep News11-21

In a dramatic overnight shift, global markets triggered a massive sell-off. - At the opening bell, the Nasdaq surged over 2%, only to reverse sharply by the close, plunging more than 2%—marking its steepest reversal since April. The sell-off began just past midnight, dragging crude oil and cryptocurrencies down with it. Bitcoin tumbled far below $90,000.

Traders scrambled to decipher the catalysts:

1. **NVIDIA's Earnings Aftermath**: Despite NVIDIA's strong earnings report early Thursday, U.S. stock futures showed muted gains, rising modestly for just an hour. When stellar news fails to lift markets, it often signals trouble ahead. The rally, fueled by "positive expectations," lost steam post-earnings as traders exited—proof the market could no longer digest good news.

2. **Bitcoin's Nosedive**: Bitcoin’s sudden crash (first dip below $87,000 since April) shattered sentiment, cascading into equities. The pattern is clear: crypto collapses drag risk assets down, as quant funds, CTAs, and risk-tolerant traders unwind linked positions. - Crypto → Leads the drop - Tech stocks → Follow suit - Broad market → Joins the fall

3. **Options Expiry Amplifies Volatility**: With a flood of options set to expire Friday, traders adjusted positions early, magnifying swings. Think: "A pile of dynamite waiting for a spark."

4. **Fed Warnings Spark Panic**: A chorus of Fed officials stressed "inflation isn’t beaten—hold off on rate cuts." Though framed as mild caution, fragile markets interpreted it as a cliff-edge retreat. The critical blow came from Cook: "Private credit losses could spill into the broader financial system." Minutes later, markets tanked.

Notably, the VIX spiked to 28, flashing a stark signal: - **"Calm is over. Turbulence begins."** The real danger lies not in yesterday’s plunge, but in the next 5-10 days.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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