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      Black Monday occurred on Monday October 19, 1987

      It wont happen again, at least not tomorrow, but what could potentially cause the major next sell-off?

      1. 2nd & 3rd wave lock-downs actually do matter for the economy and market "collectively" throws in the towel on GDP and EPS pick-up for Q4 and Q1 and there is a massive hit to numbers over the next few weeks. Stocks suddenly look very very expensive

      2. There is a string of negative news on the vaccine front - and we are back again to "at best 2H21" for timing. The COVID tunnel then looking very long....

      3. Retail participation in the stock market disappears as quick as it entered. The continued losses from the newly minted day-traders from buying out of the money weekly calls that just never get in the money finally exhausts their interest (and capital)

      4. Hedge Funds that are max long need to sell $200-300bn of equities to get back to more normal nets. Systematics go from small long to max short

      5. Contested election, political grid-lock, no stimulus checks.....

      6. For some reason (that is very hard to see right now) FED and ECB decides to not be supportive in expanding balance sheets. Maybe they actually have used all their bullets or just feel uncomfortable with where we are.

      7. Like most sell-offs; something completely unknown and new happens that triggers the first 5-7% and then all the other above kicks-in...

      All the above feels both unlikely and somehow like the "old consensus bear case" that just did not work. Maybe the only really bearish "case" out there is that it is hard to make a very credible new exciting bear case.....

      Systematic macro

      The long is very long.

      Systematic macro
      Source: GS
      Could get nasty

      CTA downside convexity in a big down scenario in the coming month is rather big, but that is obviously not the base case. Thresholds: ST 6900, MT 6692 and LT 6260.

      Could get nasty
      Source: GS/TME
      Could get nasty
      Source: GS
      It's all about the economy

      As we outlined last week: "Surging U.S. economic surprises and a collapsing dollar don’t add up. Chasing dollar shorts here feels very late in the game." Citi economic surprises have surged even further since then...

      It's all about the economy
      Source: LSEG Workspace
      Watch them closely

      Dollar weekly hammers have been occurring at local market lows. The inverse, shooting stars/inverted hammers, have many times occurred at local market highs.

      Watch them closely
      Source: LSEG Workspace