Now It Gets Ugly: CTAs Turn Short, Have Over $8BN To Sell This Week

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by Tyler Durden
Saturday, Aug 27, 2022 - 10:30 PM

It was an ironic twist: one week ahead of Friday's Jackson Hole meeting, Goldman's biggest trading desk bull, Scott Rubner, who steadfastly - and correctly - encouraged the bank's hedge fund clients to keep buying the most hated rally until its peak just below the 200DMA, joined BofA's Michael Hartnett in turning bearish and warning that it's time to sell and that the response to the question "are we there yet", is "yeah we are" and that "sellers are lower." At the same time, Goldman's biggest trading desk bear, Matt Fleury, unexpectedly jumped the fence and sided with the bullish market consensus, saying that "I am of the view Powell doesn’t have the stomach to be all out hawkish here, and will give himself room to maneuver highlighting that monetary policy take time to have an impact & they need to see the lagged impacts." He then added that "At the risk of being overly specific: I think Powell will seem dovish on Friday and risk premium will be taken out of the market" (granted, he added that "It wouldn’t surprise me to see some people return from vacation early on a market sell off into Labor Day given the current set up.") Needless to say, the former bull was right and the bear's view that Powell "will seem dovish" was wrong, and the result was a 4% tumble in the Nasdaq, the biggest 1-day drop in more than 2 months.

Incidentally for those who missed the Jackson Hole post-mortem from Goldman's econ team, here it is again: