Stocks And Precious Metals Charts - Hedge Fund Margin Call Exposes Market Fragility

A small hedge fund, Archegos, failed to meet a major margin call, triggering an avalanche of forced stock position liquidations. 

The subsequent effect on these markets can be summarized in this way: 

"'The margin call will force every prime brokerage to review their books,' said Edward Moya, senior market analyst at Oanda Corp. 'When you look at the stocks that were incorrectly bet on, Wall Street must ponder if the V-shaped stock market recovery got out of hand.'”

And so, if only briefly, the Masters of the Universe rediscovered the hidden shoals of risk, and were afraid. 

This morning was a minor liquidation event, in which almost everything was sold. 

The small caps underperformed even as the SPX and NDX managed to claw their way back to about unchanged.

Gold and silver were also sold, although gold managed to take back its losses more briskly.

The bigger cap, dividend-paying miners that I hold among my positions ended up with a nice gain for the day.

This will be a light and short trading week, because of the religious holidays.

Have a pleasant evening.

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Disclaimer: These are personal observations about the economy and the markets. In providing information, I hope this allows you to make your own decisions in an informed manner, even if it is from ...

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