Life after FOMC
Imagine bond volatility resets "properly"?
SPX vs MOVE inverted needs little commenting...
Source: Refinitiv
FOMOd
JPM's excellent positioning team notes that positioning has changed dramatically over the past 4 weeks.
1. short covering in NA reached 1.7x level over last five days
2. 5d alpha spread between longs and shorts was the most negative since early February.
3. the punch line is that this episode is short in both duration & magnitude thus far and roughly only 25% of analogous precedents.
They think "we’re more like a third or half of the way through."
Will we break out of the range mania?
SPX is "well" above the tight 3850/4250 range, and is approaching the upper part of the big range. We have seen break out attempts, both ways, from the tighter range. Is this time different? 4400 is huge...
Source: Refinitiv
Grandma Bull
No proper bull without the grand old lady of bull markets (we were not ever sure that she was still alive) Abby Joseph Cohen, the onetime Goldman Sachs partner (and now a Columbia Business School professor) making an appearance. We have had several opportunities to sit down with Abby in our previous career - she is very impressive. This time around, she says you have missed the boat: "The time to have made a really good decision was late last year or early this year," Cohen said on Surveillance this morning. "As I take a look at things now, I say equity valuations are not as appealing to me" given the run up in valuation." (BBG)
GS goes full Family Guy on Laggards
Do you remember the Family Guy joking with the Nike commercial with "Do not only have one family. Have a second family all across the country...."? GS derivs goes full Family Guy on buying laggards by not just buying laggards but buying calls on laggards....
"we see a potential rally in stocks where GS analysts are Buy rated and option prices are attractive but investors are not yet bullishly positioned. We provide an estimate of implied returns for call buyers if these stocks were to rally and hit their current 12-month price targets in the medium-term. We highlight 10 stocks in the note with high implied call-buying returns" (GS)
Here we are
Extreme greed trading at levels last seen at February highs...but of course, back then we had no AI.
Source: CNN
NASDAQ's real gap
Another day another widening of the gap between NASDAQ and real rates. Not a part of the narrative, at least not for now, but make sure to watch this closely.
Source: Refinitiv
HFs hate oil stocks
MS PB Content Group notes that net exposure to the sector is at 12 month lows … and recently, net selling has been concentrated in Integrateds (net sold for last 4 weeks), while HFs actually turned net buyers of E&Ps last week.
Source: Morgan Stanley
Tesla - "overboughest"
Tesla is extending the winning streak today again. The stock is now extremely overbought, reaching overbought levels we saw during the 2021 melt up panic. Second chart shows we could be looking at a hanging man candle, a possible reversal candle post the huge run up.
Source: Refinitiv
Source: Refinitiv
Tesla superlatives
1. current streak is the longest in its history
2. while Tesla's longest streaks coincide with double digit gains, price performance afterwards has historically been volatile on an absolute and relative basis vs. the S&P 500
3. of Tesla’s longest streaks, only 2 out of 8 occurred pre-Covid
(MS' Adam Jones)
Source: MS
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