Charlie McElligott warns of harsh market pullback and abnormal correction

5 articles · Updated · MarketWatch · May 8

The Nomura strategist said macro funds, active mutual funds and leveraged ETFs are driving a fierce buying spree after many institutions stayed underexposed in March.
He said investors are chasing winning tech and energy stocks and using call options to rebuild exposure, creating positioning that could collapse under its own weight.
McElligott recommended protection through calls on the Cboe volatility index, arguing any reversal is likely to be sharper than a normal market correction.

With hedge fund leverage at record highs, is this buying spree a final surge before a historic market collapse?

With bonds failing to hedge stocks, is the classic 60/40 investment portfolio now permanently broken?

Are hidden financial 'fault lines' setting the stage for a systemic crisis even bigger than the last one?