A JP Morgan analyst was out with a considerably generic warning in the course of the week. Warning that extreme crowding out there’s best-performing shares raises the danger of an imminent correction:
- “It just might come one day out of the blue. This has happened in the past, we’ve had flash crashes”
He described the method:
- “One big fund starts de-levering some positions, a second fund hears that and tries to re-position, the third fund basically gets caught off guard, and the next thing you know, we start having a bigger and bigger momentum unwind.”
Says a lot of the constructive information is discounted already:
- “A lot of goodies have gotten priced in”
- sees few sources of upside shock past Nvidia and the prospects for AI innovation. “That source of upside surprise is becoming more and more limited, and on the flipside, you do have more risks that are hovering in the background,”
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The problem is the timing. Solely Thursday was this:
FOMO is ruling proper now.
