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      The potential negative snowball for European economy

      CITI challenges the "always a V" theory for the European economy:

      "The new lockdowns could bring the pandemic back under control; but it is at least as likely that restrictions go on for longer, or even escalate. A vaccine or other cure that could permanently control the pandemic is possible, but this could take years, widening the range of possible economic paths further. Huge losses can snowball – Our illustrative scenarios suggest GDP might still be more than 10% below 2019 levels in two years’ time. Cumulative losses over this period could be 14-33% of 2019 GDP for the Eurozone and 20-43% for the UK. Impaired public and private balance sheets could snowball beyond the pandemic"

      The potential negative snowball for European economy
      Source: CITI
      Gross goes parabolic

      20% higher than when the year started and now at 100th percentile on 1, 3 and 5 year look-back.

      Gross goes parabolic
      Source: GS Prime
      Lower every time

      The S&P 500’s RSI has stayed above 45, for 102 straight days — one of the longest streaks in history. In the past 60 years, the S&P was lower EVERY time 2 weeks later.

      Lower every time
      Source: Subu Trade
      AI positioning

      "Positioning in the AI theme is getting crowded – we estimate a 9 out of 10 within the hedge fund universe via the lens of Mag7 and US AI Beneficiaries... managers have net bought global Info Tech stocks for five straight weeks and at a near record pace."

      AI positioning
      Source: GS Prime
      Sell Rosh Hashanah, buy Yom Kippur

      Dates are Sep 22nd i.e. this Monday and October 1st, respectively. It coincides also with post option expiry reversion effect the same week and Sep month end pension selling due to run up Sep MTD and start of buyback black-out.