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How Sustainable Is The Stock Selloff? McElligott Answers
How sustainable is the nascent correction in US equities?
At the fundamental level, a lot obviously depends on rates and, in the current context, what happens at the long-end of the US Treasury curve.
From a flows perspective, it's all about the muscle memory that says you monetize downside hedges (and long vol winners) on any selloff (or vol expansion), no questions asked. As Nomura's Charlie McElligott put it Wednesday, "playing for downside is just a continuous tactical play," unless and un
Thanks Walt as always
It occurs to me as I contemplate the market moves of the last few weeks, that since there is really no way to accurately forecast market levels, and more especially, inflection points, most of market positioning is trial and error. Do it until it doesn’t work (surprise … inflection point …) and then undo the position until that doesn’t work … I find all a bit scary, except that mostly it seems to work. Anyway, once these folks get started they have to stay busy somehow … idle hands and all that.