As traders will, accurately, point out based on technicals stocks are significantly oversold on short-term time horizons, and are thus due for a rebound. Case in point JPM's Misla Matejka who said overnight that "we note that some of the tactical indicators we follow, such as Bull-Bear at -16, are in oversold territory. This argues for a bounce in the short term...”
In a world of sheer confusion and pervasive central bank intervention, there is one immovable force of stability and direction: Dennis Gartman. Here is his latest:
Less than two months ago, on November 16, Goldman released its list of top trades for 2016, #1 of which was the infamous long USDJPY, short EURUSD equial-weighted basket which has led to massive losses for anyone who has since put it on. At the current rate of carry trade unwinds, we expect that this trade will be closed out shortly, and may have been overnight when the USDJPY plunged to the lowest since the ETFlash crash.
But while we wait, here is a reminder what the #6 top trade for 2016 was:
Once again, China was faced with the unpleasant task of deciding which asset class to intervene in: its plunging stock market, or its currency. It chose the latter, and as a result after a turbulent start the Shanghai Composite sank by 5.3% to close just above 3000 and down 15% in just the past 11 days, suggesting that the PBOC is increasingly seeing the CNY1.8 trillion (at least) spent to stabilize stocks as a sunk cost.