Gone Baby Gone

AI's favorite trade faceplants

Momentum has now given back almost all of the YTD gains. Yes, we know that most of you find it very boring to read about the momentum trade (and who ever actually decided to put on a "momentum factor" trade...?). But we still find it important because it captures many layers of the insane AI trade.

Momentum has become much more than an obscure quant strategy. It has effectively been the purest expression of the AI mania. That makes the recent collapse one of the best real-time gauges of how violently the AI unwind has played out.