What a difference a week makes…
As of the time of this publication, over the past day and half, the S&P 500 has fallen by -5.5% and the Nasdaq by -9%.
As we have long been warning, tops are processes, which can take months to play out. But corrections are events; they happen quickly — oftentimes leaving you no time to react.
Case in point: just look at Tesla (TSLA). On Tuesday, the stock hit an all-time-high of $500/share. Investor confidence was off the charts.
But now? It’s down to $380. That’s a 24% drop. In just two and a half days. 
Given the (over)confidence the months-long rally had imbued them with, many recent investors in Tesla were buying call options vs the underlying stock. Given the current plunge, those call options are now totally worthless. A LOT of people, many of them neophytes who didn’t appreciate the risk involved and who can’t afford these losses, have just gotten badly burned.
Of course, TSLA is just one example. The current carnage in the markets is widespread, across all sectors — exactly as we’ve been warning for months was likely to happen.
And yet, there’s another factor that may add additional surprise for investors into the mix: the potential that the US dollar may strengthen substantially from here. That is a move that today’s markets are definitely NOT expecting, with shorting the USD currently being one of the most popular trades.
by mki-2-2 
