If anything, it was yesterday's surge that was quite shocking and caught everyone by surprise, paradoxically doing more damage to investor sentiment than an orderly decline would have done as it once again spooked retail investors by the senseless and very whiplashy moves the market is now subject to. Case in point: after yesterday's multi-year euphoria, investor sentiment is back to record lows.
As for the two violent selloffs this week: there is no mystery. Recall that Deutsche Bank warned late in the summer this would happen for one simple reason: there are just three more weeks of POMO left after which the Fed's balance sheet flatlines, and with it, the S&P500. The only question is whether those who "sell ahead of everyone else", manage to take the S&P far below "unchanged", as prior QE ends have done, proving once again that it is all about the flow not the stock, and as a result the Fed will once again have to resort to even more QE.