TRADER: 9 things I'm chatting about as stocks sell off

Stocks are selling off again.

On Wednesday afternoon, the Dow quickly dropped by as many as 370 points after stocks had opened higher for trading.

In an afternoon email to clients, Dave Lutz at JonesTrading outlined some of the things traders are talking about amid the sell-off in stocks:

They include:

  • Brent crude oil fell 2.5%, and below $30 per barrel for the first time since April 2004. West Texas Intermediate crude, the US benchmark, also dropped, after data showed huge builds in gasoline and distillate inventories.
  • Options are expiring on Friday.
  • Investment-grade CDX is through 2013 peaks, after AB Inbev scored a record $110 billion in demand for its corporate-bond offering.
  • Chinese stocks are also under pressure, with A-shares off 75 basis points.
  • Biotechs (XBI) off 7%, down over 40% from peaks.
  • “Earnings — Full Smashdown in the Transports, off 4%+ thx to CSX and PRASM. They HATE the financials – Being Told “many desks saying they have seen the most LO selling in financials in a few years” (JPM tomorrow AM, BLK, C, PNC, RF, USB, WFC Friday …)”
  • The so-called FANG basket — Facebook, Apple, Netflix, and Google, is off 5%+. (ITG Negative not helping NFLX)
  • There’s volume buying and the VIX finally spiking. It had been under pressure during sell-offs last 2 days. VIX +13%
  • Small caps are getting crushed, with the Russell 2000 down nearly 2% and firmly in “bear market” territory.

Lutz writes that the sell-off is “starting to feel very capitulatory…. Very forced…”

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