Nomura’s McElligott: Equities Vol Complex Is ‘Broken,’ ‘Something’s Gotta Give’
After a blistering run that conjured every superlative in the dictionary, US equities betrayed the first signs of wanting to crumble under the weight of their own exuberance Thursday.
Tech shares (which lagged in Wednesday's rally) fell sharply out of the gate in what will invariably be described as a bad omen, considering the rather precarious dynamics which conspired to push the Nasdaq 100 to a 30% premium versus its 200-day moving average (figure below).
Over the last three sessions (and in
The Robinhooders are about to get crushed as they buy a short-term oversold tech bounce only to get hit with a Thor-sized hammer as the big boys sell bigger blocks.
That was my growing sentiment as too, well said.
I mage is so small I can hardly read it. In addition I cannot copy out to another program and enlarge to make readable. HELP?
I figured out how to englarge by opening in new window and using browser controls.
Lack definition of units makes these images almost cartoonish.
Not sure what you mean. There’s no “lack of definition of units”. The axes are properly labeled in the only way they can be labeled.
The NDX is experiencing a significant move today, not quite the 6-8% single day decline Charlie mentions as a possibility but ~5% is notable. We often poke fun at the Robinhooders and retail day traders in these comments (with good reason), but they don’t have the collective funds to explain the notional amounts behind some of the tech call buying we have seen recently. Some large institutional investor or hedge fund running a nice and targeted systematic strategy has been forcing dealers into short gamma positions in tech names with heavy weight in the indices, in my view retail has mostly just tagged along for the ride, they will, however, get totally wiped when this unwinds, although the Fed may still save the day…