He is saying when people exit and index sells all their stocks equal to current market cap rankings that the opposite side of trade buy demand for all those won

He is saying when people exit and index sells all their stocks equal to current market cap rankings that the opposite side of trade buy demand for all those won’t be equal. Bad stocks may go down further than solid companies. A shift in value vs growth preferences caused by the downturn itself could be the cause of that. The entire index and all holdings would then HAVE to readjust for this discrepancy and lead to more forced selling of bad stocks and buying of solid companies creating more liquidity crisis.