We noted that this improvement was important for the bullish thesis, as it will take some time until momentum improves and vol normalizes inducing institutional investors including CTAs and other trend following investors to start building up long equity positions again. In other words, we had hoped that retail investors, perhaps induced by “buying the dip” mentality, were emerging as the marginal buyer of equities. This past week has shaken this hope for two reasons……, “the potential withdrawal of retail investors as the marginal buyer of equities could create clear downside risk for equity markets for the near term – especially after buying an unprecedented $100bn of equity ETFs in only one month during January.”
