Nomura’s McElligott: This Is ‘The Next Battle In Equities’
There's a new battle in equities after Monday's dramatic selloff on Wall Street.
As documented here prior to the cash open, US stocks were effectively "unshackled" coming into the new week, as the gamma grip came off post-Op-Ex.
Monday was, as Nomura's Charlie McElligott puts it on Tuesday, "all about 'freedom to move' in the absence of the recently extreme dealer long gamma insulation flows".
Of course, "freedom to move" manifested itself in a wholly pernicious way for equity longs on Mond
How low does this go?
Over the next two, three months? Twenty percent correction doesn’t seem unreasonable. Hell, we might be there by Friday.
First battle at 200MA I’d think, then we’ll see if there’s a relief rally… I expect COVID 19 to be a bigger deal in the USA than expected.