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Kaliber Capital Management, LLC

Shocktober: Scaring Up a Rally?

Last week we saw to significant drops in the market driven by algorithms after we dropped below key technical levels.  Algorithms using technical analysis drive most of the short term trading volume in the markets now, but they don’t do well at identifying when human sentiment will turn.  Everyday market participants tell themselves stories to explain the past and their future expectations.  This week we’ll look at how these stories create changes in sentiment to answer the question did we just scare up a rally and more important will it last.