what is the discretionary trading community doing? amidst ongoing skepticism, there has been begrudging demand. the past week saw significant buying, while noting almost all of it was short covering (link). to be sure, we haven�t seen a full-throated capitulation to the bullish side, but some forced risk adjustment given the rip in low quality exposures. remember the starting point: we came out of a brutal Q2 with the net and gross running at the lowest level since March of 2020; now there�s an open question on whether this cohort will need to attend to right-tail risk should the market keep running.
December 1, 20221 min read