Should We Fear The Upside?

Should we fear the upside?

The macro backdrop remains challenging, but the ingredients for another powerful equity squeeze are falling into place. Goldman sees a pathway higher into year-end following one of the most aggressive deleveraging episodes in a decade. Seasonality is turning supportive, corporate buybacks are returning in size, and the semiconductor trade has undergone a brutal reset. Add a market that has absorbed plenty of bad news, and even the upside could become violent.

The next rally may have more to do with positioning and flows than fundamentals.