ANALYST: The Hacked AP Tweet Market Plunge Just Caused Traders To Reveal Their Hands

Earlier, the AP sent out an erroneous tweet reporting that U.S. President Barack Obama had been injured by two explosions at the White House.

Markets instantly tanked on the news.

Of course, a minute later, when the AP confirmed that the tweet was false, the stock market bounced right back to where it was trading before the tweet hit the stream.

Société Générale FX strategist Sebastien Galy writes in an email to clients that this episode "will prove a good test of the positioning of the markets."

"You now have the sensitivity of the markets to a large negative (fictitious) shock from which to deduce the positioning of the market," says Galy.

The most notable moves seem to be the S&P 500, which instantly fell 1% on the news, the VIX, which jumped 9%, and the dollar-yen exchange rate, which instantly dropped 0.7% (meaning the dollar weakened against the yen).

The takeaway, according to Galy?

"The market is very long equities and short yen."

Below is an intraday chart of USD/JPY.