Saturday, May 28, 2016

YOLO: Globalization Is Now Triple Leveraged To Oil

WTI Crude with volume from the UWTI 3x leveraged ETF:

WP: Dec. 30, 2015
SEC: What Caused August 24th Flash Crash

"When fears of a slowdown in China sent U.S. stocks plummeting in late August, some of the market mechanisms meant to protect investors during times of volatility may have triggered even greater losses among exchange-traded funds"

"About 19 percent of exchange-traded products fell by 20 percent or more that day, the report found."

"One factor that may have contributed to the significant price drops among ETFs is related to the technical methods some brokers and advisers use to limit losses when stocks are falling. One tool, known as a sell order, leads investments to be sold after they fall below a certain price. But when stocks are falling rapidly, those investments can be sold for prices far below what investors intended, which could contribute to losses."

What has changed? Nothing.

Oil and dividend stocks (below) are the two most crowded trades:
CNBC: May 25, 2016
Wizard of Wharton: High Yield Stocks Are In the First Inning

And Municipal Bonds