In terms of the shift in sentiment, there is almost no period comparable to that of today's US stock market. With each turning point, the longest bull market in history is nearing the end.

Three weeks ago, investors were doubling their bets that the rally would last for a long time, but now they are being forced to close their positions in a rare way. The US stock market is in the fastest pullback in history, and unless the pace of selling slows, it is really possible to fall from an all-time high to a bear market at the fastest pace in history.

If the rally that began on Monday 11 years ago finally ends, the iconic theme of its final chapter will be an asymptomatic, hysterical plunge from its highs. Even in the 1987 crash, the Dow Jones industrial average fell 22.6% a day, months after the market peaked.

"We have gone from being extremely excited to pessimistic,"Said Kevin Caron, a portfolio manager at Washington Crossing."this needs to be adjusted quickly. "

S & p 500 futures suffered one of the biggest declines in history on Sunday night, and the s & p 500 may be less than 4% short of the traditional bear market definition of a 20% decline-and possibly closer. The sell-off on Sunday night triggered the limit, limiting losses to 5 per cent. So investors don't know how bad the sell-off will be when normal trading resumes.

Despite several attempts, S & P 500 index futures have not been able to get out of the limit.

If a 20% decline is completed by April 1, it would be the fastest fall in history from a record high to a bear market. During the Great Depression of 1929, the end of the bull market took 42 days.

Frenzied repricing can be reflected in a series of charts that reflect investors scrambling to adjust their positions to the impact of the epidemic. This may also be a consideration for investors who use the stock market response to estimate the impact of the epidemic. While the prospect of a pandemic is frightening, the pain of the market partly reflects the elimination of its own excesses.

Adjustment of fund positions

From computer-driven funds to stock pickers, fund managers have been pressing the sell button. According to a survey by the National Association of active Investment managers, the fund's stock holdings have just recorded their biggest decline since 2014.

JPMorgan Chase & Co strategists such as Nikolaos Panigirtzoglou said the commodity trading adviser (CTA) strategy could be the "core" of the stock market sell-off in late February. They estimate that between mid-February and the end of the month, such investors have gone from being fairly bullish to fairly bearish.

This creates a "negative flow pulse", Panigirtzoglou wrote in a Feb. 28 customer report.During the market correction, trend traders held a large number of long positions in US stock futures and were forced to suddenly close their positions, thus spreading their negative momentum. "

In its latest report on Friday, Panigirtzoglou estimated that CTA sold close to $400 billion in the last week of February. If the s & p fell another 4%, it would trigger another $120 billion sell-off, he said.

Strategists such as Deutsche Bank's Binky Chadha summed up the fund's position and found that the overall exposure had changed from "extremely over-matched" to "very low-end". By the standards of the past decade, the position indicator was in the fifth percentile on March 5, compared with the 95th percentile a few weeks ago.

Short seller

It is time for bears who have little room to defend themselves during the 11-year rally in the stock market. The Goldman Sachs Group group's basket of worst-selling stock indexes tumbled 14% in the last week of February, with short sellers making their best returns since 2012. The index fell another 5.6% last week.

As the market decline snowballed, short sellers continued to increase their positions. The ratio of short stocks to outstanding shares in the SPDR S & P 500 ETF trust under the symbol SPY has risen to 7 per cent, according to IHS Markit. At the beginning of the year, it was only about 1 per cent, the lowest level since 2018.

Options trader

In the derivatives market, excitement has been replaced by panic. The five-day moving average of stocks that have risen along with the increase in short positions has risen to nearly 0.8, the highest level since August. A month ago, the ratio was at a nine-year low of less than 0.5.

"A priceless question is whether the decline in the stock market over the past two weeks has begun to spread disease from Wall Street to ordinary people."Said Chris Rupkey, chief financial economist at MUFG Union Bank.As these double-digit corrections exaggerate losses, the stock market may be ahead of the economy. But if companies start to lay off people, the game will be over, because by then, the recession will mean that the bull run in the stock market will really end in the next few years. "