Chasing Ghosts: The Rally That Wasn’t There

Chasing Ghosts: The Rally That Wasn’t There

For weeks, 4,200 on the S&P was bandied about by some top-down strategists as a "sell-the-rip" level -- a kind of bridge too far for a star-crossed bear market rally condemned to collapse under the weight of negative earnings revisions. The benchmark of all benchmarks is testing that level and there's a case to be made that US equities could breach the threshold -- and then keep going. "We are in the midst of an angst-ridden pain trade higher in stocks which is pushing us back into increas
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2 thoughts on “Chasing Ghosts: The Rally That Wasn’t There

  1. Perhaps a naive question, but is there a strong and direct correlation between: (i) the big $’s being swung around by the “un-economical” CTA and Vol Control players, and (ii) the new $’s that were created via QE (…which, by and large, are still out there “circulating around”, even as new creation has ceased) ?

    1. I personally don’t see a correlation, QE is basically an asset swap resulting in the creation of bank reserves with the Fed, so not sure how that would connect to CTA/systematic funding, there is a massive pile of institutional money floating around independent of QE even if QE might inflate financial asset pricing.

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