Part 3/14:
Once the initial panic subsided, the markets began to rebound, showcasing the classic "FOMO" response: a sharp quarter of a percent decline followed by a strong five percent rally. Key indices and asset classes—the S&P 500, gold, Bitcoin, and the euro—exhibited this rollercoaster pattern. The S&P 500 notably plunged below 3500, a psychological level, then rebounded, illustrating how critical support levels influence trading behaviors.
Market Dynamics: From Panic to Opportunity
The initial selloff was driven by a mix of panic selling, short covering, and the unwinding of put options designed to hedge against market declines. As investors bought back stocks to neutralize their positions, bullish trading opportunities emerged—most notably in tech giants like Tesla.