Why does the market always rebound when analysts say the market is about to crash?

Today's topic is a long-standing conspiracy theory: is the agency deliberately exaggerating the panic?

The reason is that I saw an article yesterday titled “Crash-obsessed traders squandering options at 20-year highs.”

According to the article, according to data from Options Clearing Corp., institutional traders spent a total of $8.1 billion on stock put options last week, the most in 22 years. After market capitalization adjustments, hedging demand is on par with the 2008 financial crisis.

Since last week, we've seen many institutional analysts, including well-known investors, come forward to say that the bear market hasn't bottomed out.

“They are buying protections against collapse at an unprecedented rate,” Sundial Chief Research Officer Jason Goepfert (Jason Goepfert) said in an interview. “The sudden large-scale hedging activity of some of the biggest traders in the market is disturbing.”

So the interesting question is, is it because the bear market hasn't bottomed out yet, or are institutions seeing more institutions buying options, causing other analysts to think that the bear market hasn't bottomed out yet?

I don't think I need to say that the conclusion is obvious. There seems to be an explanation for Tesla's strange short-term interest over the past two days.

I mean, sometimes retrograde orders are more credible, such as a call between Apple released on August 12 and Apple on August 31.

The chart below shows the Chicago Options Exchange's bearish/bullish ratio, which is the ratio of total bearish volume to total bullish volume on the Chicago Options Exchange. Because it is bearish/bullish, the high point in the chart represents a high ratio, that is, the bearish amount is high, and the low point indicates a low bearish amount. When we map the low point in the chart to the fluctuation of the general market, we find that the low point, that is, when the amount of bearishness is the lowest, is often the top range of the market.

So at this point, we should theoretically conclude that when the bearish/bullish is at an all-time high, the bearish/bullish stock market should be bullish.

But for institutional investors who manage other people's money, a bottom-up rebound isn't the most important thing, but what if the bearish/bullish highs are higher? In fact, this situation has not never happened before, so from the perspective of post-employment responsibilities, it is better to hedge risks by increasing positions and investing with the flow.

Of course, there may be another problem, and that is that we may be laughing too early. In previous observations, it was found that large options orders often take a week or more to ferment. Maybe this week is really okay, maybe next week is really fine.

However, looking directly at the chart, the conclusion is that Cboe's bearish/bullish ratio is the opposite of the current week's market.

Referring to yesterday's big orders, US weighted stocks still mainly cross borders, and $Microsoft(MSFT.US)$ und $Meta Platforms(META.US)$ It has also been launched. AMD either rose above 90 or below 70; similarly, Nvidia was below 155 or 115.

The more definitive purchase of large orders is the Hang Seng Index: $iShares China Large-Cap ETF(FXI.US)$