As you’ve no doubt gathered from the recent messaging herein and, especially, on the videos, we see odds favoring (but never guaranteeing, mind you) yet another leg lower for the current bear market.

We’ve touched on everything from Fed policy/rhetoric, to macro conditions, to options dealers’ positioning, to short covering, to the long-term technicals, to the fact that the latest rally has been punctuated by impressive moves in the stocks of the utterly least impressive companies (“meme” stocks), as factors that warrant a healthy degree of skepticism right here.

This week’s Macrovoices podcast featured the highly-respected Nomura macro strategist Charlie McElligot. Charlie masterfully and methodically laid out much of the narrative we’ve been presenting herein.

Here’s his close to the conversation:   (emphasis) mine

“You tend to see those spot vol up rallies collapse under the weight of the implied expectations. And that’s what we saw, certainly multiple times with the memes.

So there’s just a lot of stuff going on in the market right now. Whether it’s the meme stock, irrational exuberance stuff, whether it’s this speculative very short lead nature of this rally, whether it’s the systematic flows that I spoke to that have been so much of the buying and particularly with the equities stuff that are now kind of tuckering out.

Now back to flat, against this idea that I do think that inflation is going to stay sticky higher for longer. You know, where you can get down to 6, 5, 4 percent (inflation), but you’re not going to be able to get to 2% in that market that has been trained into thinking that the first sign of a growth panic, the Fed can ease. (Those who expect) the Fed to buy assets, you know, is (are) set up for disappointment and could be caught flat footed.

Again, I think there probably is one more downtrend before we can really get that kind of full capitulation and get kind of full tilt, all in constructive, at some point next year.”

Okay, so now I’m done till next weekend 😎…

Take care,
Marty