Faber News Flow

SPX - time to chill? SPX has squeezed from the low of the range straight up to the high of the range. People still try to push the break out momentum, but there is no trend in SPX to be pushed. Let's see where we go from here, but we are rather overbought; 4500/4520 is a big "congestion" area and short gamma is gone (dealers are sellers of deltas on upticks). Time for SPX to chill for a few days? Source: Refinitiv Who is buying this tape right now? Answer: CTAs ($20b S&P this week), Retail (High Retail Sentiment Basket +578bps...GME +30% and TSLA + 8%), HFs Covers (GS Most Short Basket +376bps) and L/Os back nibbling in China ADRs on heels of BABA $25b buyback (China ADR Basket +823bps) (GS trading desk) ~7% stocks account for over 90% of all gains Even in the public markets power law dynamics play out. In between 1980 to 2014….~40% of stocks lost money, 64% of stocks underperformed benchmark and ~7% stocks account for over 90% of all gains (Bobby Molavi) Time to hedg...

It's not just Wall Street's increasingly less shrill army of legacy permabulls that has dismissed the collapsing 2s10s yield curve in favor of other, less relevant alternatives when it comes to timing the next recession: during Monday's speech by Jerome Powell, the Fed chair did so too, because as DB's Jim Reid explains, the Fed has "long preferred measures like the spread between the 18m forward 3m yield and the 3m yield which as our CoTD shows is now the steepest since on record with data going back to 1996." This has profound implications, the biggest one being that  the Fed won't see a 2s10s inversion as a reason to slow down rate hikes and that on their measure they have a record level of steepness in their curve to play with before the curve gets to a flat enough level to worry them.  In other words, the Fed won't realize that the US is in a full-blown until as much as 9-12 months  after  the fact. For his part, Jim Reid writes that "I can...