Markets stocks volatility

Nomura’s McElligott: Here’s What Caused The ‘Sling-Shot Move’ In US Equities

"Melt-up flows".

You may not put much stock in Donald Trump's "Phase One" trade deal with Beijing or in the idea that risk assets should be inclined to trust any kind of positive narrative around Brexit, but as Nomura's Charlie McElligott writes on Wednesday, "the injection of last week’s 'positive macro catalysts'... has kicked off a +5.0% rally in SPX in nine days after the initial -5.6% move in Spooz from September 19 through October 3". It's worth remembering that this isn't all about a "rational" response to what, at least on the trade front, is little more than an agreement to keep talking (and even that may be in jeopardy, depending on the Trump administration's willingness to bend on more tariff relief and Congress's actions regarding support for pro-democracy demonstrators in Hong Kong). Rather, this recent move to the upside is in no small part attributable to the collision of two ostensible macro catalysts with what McElligott reminds you was "an investor thesis which was largely 'long worst-case scenario, short good news'". This is part and parcel of the theme that’s pervaded Charlie’s recent daily missives, and he's out reiterating it on Wednesday. Read more: Hedges Are ‘Be
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4 comments on “Nomura’s McElligott: Here’s What Caused The ‘Sling-Shot Move’ In US Equities

  1. PaulMiller says:

    Sanskrit is more easily deciphered than Charilie’s notes.

    • George says:

      Sometimes I think the computers have actually taken over the trading systems and we are all Dinosaurs …..trying to make sense out of the arbitrary…

  2. vicissitude says:

    It’s hard to believe that this much volatility will result in sustainable gains, but then again, the computers love ups and downs. The volatility at the end of last year was dramatic and the trump economy set new records with stocks being down at record levels … I recall reading something about the Titanic — anyway it would be nice if some super pro had a take on how whipsaw volatility normally plays out in annual terms. Additionally the clown MAGA economy performance still lags Obama performance by miles!

    Volatility spikes @ FRED: https://fred.stlouisfed.org/graph/?g=pb3A

  3. Tim says:

    Hey, I just want to thank thank you so much for taking the time to translate these notes for us. I absolutely love the website in general, and it is helping my trading to boot. Thank you!

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