The last time I remember manipulation this blatant was in the summer of 07. I’ll have to dig out that chart; seems to me it was an announcement around 8:15 am that killed shorts precisely before the options were set to expire.
To be sure, this market was technically oversold. ($vix.x 40+) Bear markets have a way of doing that.
A market at the edge of the abyss was saved from freefall today. The only way turarounds can happen is by egregious reversals like today’s that chase the bear back into his cave. Just as a boxer is undeterred by a light jab, it is insufficient to have a 10 or 20 point rebound that scares a bear back into hibernation.
These dramatic reversals show why it is important to NEVER average in big time against the movement of the market; there is no telling how far any “bounce” will go.
Option expiration also provides a unique opportunity to purchase cheap calls as a hedge against this type of day. Savvy traders made money both ways, while stubborn short sellers who didn’t recognize the impact of the temporary change in psychology by fed intervention.
Catching a falling knife or safe is disastrous; once it is bouncing it is equally ruinous to mis-understand the reversal.
The essence of trading is to go with the flow or stand aside.