Fast money & systematic sellers hit the structural bid
A clear shift in HF sentiment
"There has been a clear shift in HF sentiment across the desk. Single-name short additions totaled $1.5-2bn last week, with Thursday marking the largest day of short additions in the last 3 months on MS books. Conversations across nearly all client types over the past two weeks settle on some sort of range bound to negative risk view at the Index level over the medium term" (Morgan Stanley)
CTAs dancing close to the door
Equity stop loss risk continues into this week, BofA quant team notes. "Last week we noted that our model implied CTA equity longs were at risk of hitting stoploss triggers. Any larger downside move should be accompanied by CTA unwinds and given positioning in US equities is typically larger, it could potentially amplify negative moves this week". (BofA Quant)