Mutual fund redemptions and shorting of index funds also have an effect. Fund managers feel compelled to sell stocks that are down relatively less as they are still trying to report superior gains over time periods. Mutual fund investing is really dying.
this drastic drop is a bit puzzling...are they baking in a huge miss on earnings already? Usually when the market is down big, this is pretty solid...usually. It's probably shorts at work to some extent to....I'm starting to wonder how much of this down turn over the last week or so is just people hammering short positions, which could cause a major rally, and then of course a massive correction. If only the regular guy had this playbook.