Marko Kolanovic: October’s ‘Rolling Bear Market’ Could Morph Into A ‘Rolling Squeeze Higher’

Marko Kolanovic: October’s ‘Rolling Bear Market’ Could Morph Into A ‘Rolling Squeeze Higher’

Although U.S. stocks look poised for a decent session on Tuesday, the market is still on pace for its worst month since 2009. The narrative here is reasonably clear. The bear steepening that preceded the early October drawdown was generally seen as product of the bond market “catching up” to the reality of the overheating U.S. economy. Equities digested rate rise well on October 3 — it was the “good” kind of bond selloff, driven by expectations of economic outperformance. The next tw
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3 thoughts on “Marko Kolanovic: October’s ‘Rolling Bear Market’ Could Morph Into A ‘Rolling Squeeze Higher’

  1. I think this is exactly correct. People got caught poorly positioned, panicked to save the year, everyone trying to get out before the others, holding out for a bounce that happens briefly, risk guys telling you to take exposure down, etc. classic ST bottom stuff. With slowing growth internationally and Us growth about to slow they will go back to the growth names they dumped at lower levels and chase then to try to save their year. Happens often. The growth names have the best bal sheets and FCF conversion rates and actually can grow in slower times and are now at better valuations. Regulatory and/or higher rates could derail but they are more defensible than many think right now imo given the mass selling we have seen in Oct. I am in Marko’s camp.

  2. Given the large number of Geopolitical Landmines in the field as well as the late cycle stimulus risk the re-risking crowd is going to hold this market on a short leash.. Bit by bit resultant volatility will cure the ” buy the dippers” of that mentality.

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