Historically, This Has Signaled A Short-Term Pullback; Goldman Flows Guru Suggests Hedging

Framing the entire market right now, top Goldman Sachs trader, Cullen Morgan writes that risk appetite and sentiment have rebounded dramatically, positioning is higher, the vol market suggests investors are aggressively chasing upside, and spot is starting to screen stretched. 

The GS Risk Appetite Indicator – which aims to track the level of global market risk appetite and risk aversion based on various market variables – is now at its highest level in over five years, and one of the highest readings on record.