We know from historical experience that overvalued, overbought, overbullish syndromes have a tendency to produce an extended period of small incremental advances and marginal new highs, often followed abruptly by “air pockets” where the market can give up weeks or months of gains in a handful of sessions. As noted above, we don’t have latitude here for bullish positions, but provided more benign data, we expect to modestly soften our hedges in order to reduce our vulnerability during periodic (if short-lived) waves of “risk-on” speculation.
While in your seat, please keep your seatbelt firmly fastened.
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