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It was quite a reversal in equity markets today.  On Sunday evening, futures fell 100 points to 2,950, building upon 5 days of weakness and it looked like Monday's session was going to be bloody. At the open, S&P 500 fell to 2,966, or >8% off recent highs and then rallied +100 points to close up ~1% to 3,067. Here is why this reversal is so telling.  More specifically, the shallowness of this sell-off is telling.  Equity markets have rallied relentlessly, up ~45% from 3/23/2020 lows and are currently overbought (which is never a tactical sell signal), and given the widely held view that stocks are disconnected from fundamentals, and many investors see this as a "retail investor suckers rally."  Shouldn't this sell-off be gaining momentum?  But instead, equities only retraced 250 points (Sunday evening futures) or 25% of the 1,000 point rally before reversing.In our view, this reflects how much dry powder is on the sidelines, and how more investors, in our view, are uncomfortably sidelined, rather than uncomfortably long.  After all, after a prodigious rally like this, and the bloody Sunday evening futures trading, Monday should have seen a massacre. One thing we noticed in the past week, is growing recognition that the mea...

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