Too much too fast

Fuhgeddaboudit

SPX back to when Fed started raising rates.

Source: Refinitiv

"We" are fuller

Captures the market pretty well: "Slowly and quietly….starting with CTA’s…followed by retail and then topped off by Insto and Hedge funds….positioning has gotten much fuller" (Bobby Molavi, GS)

Fear falling liquidity

More bearish stuff from Wilson: "...we have been highlighting the risk to markets from the $1.2T in Treasury issuance we expect over the next 6 months. This should begin to hit asset prices by the end of this month and carry into the fall". On the other hand this is not new information, but maybe it gets some traction...

Source: MS

Too much too fast

Too much, too fast can be just that, and requires patience / caution on the back of it. Indeed, with almost 90% of SPX stocks trading above their 20DMA, this is a high-class 'problem' to have, and no one should / would be surprised by some corrective activity shortly thereafter. In fact, even the bulls likely see the logic / medium term benefit in this. (MS sales)

The big bid fading

The buyback blackout window has kicked in and around 60% of companies are in the black out window according to GS. This grows to around 85% at the end of week.

Source: GS

But bond volatility has come down lately

Yes, MOVE has moved lower, but SPX has "discounted" this for a while...SPX vs MOVE inverted.

Source: Refinitiv

Equities and the downside convexity

One of the first to play the upside momentum during the squeeze were the CTAs. They caught the move successfully, but a possible move lower will force them to sell equities. Downside is the main convexity here.

Source: GS

The bull in VVIX

The VVIX vs VIX gap continues to widen. Haven't seen such a wide gap in a long time...

Source: Refinitiv

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