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Here Comes The Next Leg Higher: CTAs Momentum Flips Bullish With Buybacks Restarting In 4 Days

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by Tyler Durden
Tuesday, Oct 25, 2022 - 10:22 AM

Last Wednesday, when we pointed out that a veritable cottage industry of "tactical bulls" had emerged across Wall Street, including from such permabears as the two Michaels (Hartnett and Wilson) all calling for a sharp - if brief - bear market rally (incidentally, several days after we first reported that the "capitulation is near" and a melt up is imminent) which could carry stocks to 4,000 or higher (a call which Michael Wilson doubled down on earlier today), we focused on three catalyst listed by JPMorgan flow trader Andrew Tyler who said that the key to a more aggressive squeeze may lie with the following:

  1. CTA buying – thought to activate in the 3800 – 3900 range;
  2. Buybacks – said to accelerate coming out of the earnings blackout window as soon as next week;
  3. Macro data – this is still a market driven by yields and the Nov 2 Fed meeting and Nov 10 CPI release loom large.

Fast forwarding to today, when we still have almost two weeks until the macro data is triggered and so we can't yet speak to it will bring, but we have gotten much more clarity on the other two critical technicals which as even Wilson admits, may be all the matters.

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