The Dow is down over a hundred points today and it’s making professional traders nervous.
We spoke to a friend this morning at a large prop trading desk inside an investment bank and we’ve never heard him so bleak. He says that all the equity traders on his desk think the market will do nothing but go down for the rest of the year.
“We’re all waiting for the market to crack. And it looks today like it has cracked. We’ve had all this upward momentum with no volume. But now that thin buying up has gone. The only question in my mind is whether it’s a slowly deflating balloon or whether we’ll go into freefall,” he said.
Make of that what you will. Maybe it’s a contrarian indicator. After all, very few of these prop trading types believed in the rally going all the way back to March. Maybe the Wall Street traders are now contrarian indicators.