Nomura’s McElligott On Saudi-Iran Proxy War And Possible Implications For Momentum Unwind Trade
“Another abrupt ‘about-face’ for markets”.
“Another abrupt ‘about-face’ for markets”.
“And yet HILARIOUSLY, Joe Schmoe retail investor looking at simple Index returns wouldn’t have had ANY idea of the calamity occurring”.
“…the current consensus / ‘Momentum’ positioning construct is a pure reflection of the ‘Duration Trade'”.
“From a secular perspective, the only catalyst I can see on the horizon”…
“Merely ‘face time’ for markets and little more”.
“Gamma gravity” time.
“I believe risk trades higher into the ‘Gamma’ events mid-month”, but…
But the good news is…
The performance gap for August ranks in the 7th %ile since 1982.
“The pieces were already aligning”.
“Here we are now, with all of this ‘crash’ now increasingly likely to ‘bleed out'”.
“…this re-pricing lower in the VIX complex should drive powerful second-order impacts”.
That said, risks come back into play starting in late August.
Hot takes, coming right up.
Markets could be in for a messy couple of days.
There’s no room for the mincing of words.
“From the perspective of a ‘give ‘em an inch, they take a mile'”…
What’s the real rationale behind a potential “shock” cut?
“Any sort of ECB ultra-dovish ‘shock’ yesterday would have put considerable pressure on the Fed”.
The market zeitgeist is largely unchanged.
Some “proper profit-taking”.
The same old “force-in” narrative underpins the bull thesis.Â
“The QE-trade is back in a major way.”
“Without a doubt, a June cut is trending higher, but not my base case”.
“The Fed HAS TO be conscientious.”
And there’s a Nassim Taleb quote for good measure.
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